Sonos (SONO), mcap=$2.4bn, price $19.07 vs $23.35

Short pitch:
– Seller of audio products for home entertainment.
– COVID beneficiary that has seen significant demand pull-forward, especially in high-margin products.
– Business expected to revert to pre-COVID levels, but so far trades at a premium to hist. valuations.
– Management’s guidance for FY’22 is still optimistic, but back-end loaded.
– Expected to miss 2022 guidance.
– Insiders aggressively selling stock.

Valuation: SONO trades at 1.6x EV/sales, a premium to pre-COVID levels of 0.7-1.0x. Expected to trade down to 1x revenues with missed 2022 guidance.

Exp. gain: 35% to $15/share

Full SONO write-up (free guest account required):

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