Sonos is an American developer and manufacturer of audio products, including multi-room audio products, home cinemas tower speakers, and more. Its shares are traded 50% off their peaks of 2021. The demand for such devices is rising amid development end expansion of streaming services like Netflix and Disney+. The company has faced a shortage of components used to produce its devices along  with inflationary price increases. However, these problems are of a transitory nature, as the entertainment industry will continue to grow worldwide. People are less likely to visit cinema theaters than before the pandemic and are more inclined to watch premiers at home.

Sonos is estimating this home cinema devices market at $89 billion, while the company’s annual revenue is barely at $1 billion. Its revenue grew by 20% year-on-year to $399.8 in the Q1 2022 beating consensus estimates at $351.8 million. In comparison its revenue only grew by 3% in the Q4 2021.

The company continues to develop new devices: Sonos Ray, Sonos Roam and others, expanding its clients base. The shortage of components hit the company badly and its EBITDA margin fell to 44.8%. However, the management of the company compensate for this negative impact by lowering administrative spending.

The target price for SONO stocks in the mid-term is at $33.