Is Sonos Stock Still Flashing a Buy Signal?

Speaker company Sonos, Inc. (NASDAQ:SONO) has partnered with more than 100 companies that offer music services, including Google parent Alphabet (GOOGL), Spotify Technology (SPOT), and Amazon.com (AMZN) Music.

Sonos stock is up 47% year-to-date, but has taken an 8% haircut this quarter.  Sonos has outperformed analyst expectations on all three of its most recent earnings reports, resulting in post-earnings gaps of 7.4%, 15.7%, and 29.8%.

In general, Sonos stock seems to have significant potential as a long-term growth play for potential investors. The company’s revenues have increased by nearly 60% since fiscal 2017 and, more importantly, SONO has increased its net income by roughly $125 million during the same period, even reaching profitability in the fourth quarter of fiscal 2020. Sonos also carries an impressive balance sheet with $638.93 million in cash and only $50.08 million in debt. Overall, Sonos stock is well positioned for continued growth, despite its relatively high price-earnings ratio currently sitting at 37.78.

What's more, SONO sports attractively priced premiums at the moment. The equity's Schaeffer's Volatility Index (SVI) of 43% sits in the bottom percentile of its 12-month range, indicating option players are pricing in low volatility expectations. Lastly, the security's Schaeffer's Volatility Scorecard (SVS) ranks at 85out of 100, implying the stock tends to outperform these volatility expectations -- a boon for option buyers.