Sonos (SONO) Stock Forecast & Price Target

Sonos is benefiting from a strategic reset under CEO Tom Conrad that has repaired the software experience, expanded ecosystem value, and supported stronger customer acquisition, including a double-digit lift from the Era 100 price cut. The company is also showing tangible operating momentum, with March quarter revenue up 8% to $281.5M, strong EMEA and APAC growth of 21% and 25%, and management guiding above consensus for the June quarter and later periods. With 64% of revenue still coming from the Americas, a 22% revenue installer channel, and shares trading at only 8.8x to 9.5x EV/CY26 EBITDA, the turnaround and margin expansion potential appear underappreciated.

Sonos is facing meaningful margin pressure as rising DRAM prices create a 200 bps gross margin headwind, while March quarter GAAP gross margin slipped to 44.3% from 43.7% and Non-GAAP gross margin fell to 46.0% from 47.1% a year ago. Although first half gross margin dollars rose 7.9% and revenue increased 6.0%, that improvement appears modest relative to input-cost inflation and does not yet show strong operating leverage. Non-GAAP operating expenses rose only 1% year over year, but Adj EBITDA margin was still just 0.6%, highlighting a thin earnings cushion and limited resilience if component costs or demand soften further.