Nadine Terman on Fast Money Sonos Inc. SONO-Q BUY Aug 13, 2021

They make speakers for the home connected to the internet. Their marketing has brought new buyers in sound bars and smart speakers. He thinks it is a great opportunity. Their revenues have jumped 400%. There were rumours they might be a take out target in the next year. Yield 0% (Analysts’ price target is $11.93)

Breaking news: Judge rules that Google infringed on patents and sides with Sonos He's owned this starting at $14 a long time ago. He still owns this, so today was an exciting day, more so than any earnings report. There were five patents namedm in the lawsuit, but there were 150 allegedly in the infringement. He expects Google to settle instead of taking this suit to a federal court, which will result in, say, a 20-year licensing fee with Sonos. This will boost Sonos' bottom line and this will demand a total re-rating of this stock. This is a huge win for Sonos.

Allan Tong’s Discover Picks This double-whammy propelled Sonos shares by 8% at Monday’s opening, the first session after that court ruling. Volumes hit 15 million a mere hour after the opening bell, compared to a daily norm of 1.9 million. You may think that the upswing is over, but there’s room to run for this maker of home theatre speakers which has handily beaten its last four quarters. Sonos also boasts above-industry margins, such as 47.41% gross margin compared to 27.95%, and an ROI of 34.72% vs. 7.24%. However, Sonos pays no dividend and its PE is fast leaving behind the industry’s 19.3x, but that’s to be expected for a stock that’ll enjoy sharp growth. Three analysts rate Sonos a buy and two others a hold, though all those calls were made before Friday’s ruling. The price target is $50.50. At last Friday’s close, shares stood at $38.14. On January 4 this year, the price was $23.24. Read 3 Growing Tech Stocks for our full analysis.

Year-end seasonal trades Sonos. headwinds were supply shortages, but are now settled. Also, travel names and Costco will rally. People are planning vacation 6-9 months out in airplanes and hotels. For cyclicals, buy banks if you think interest rates will rise.

Design and manufacture multi-room, wireless, portable audio products. Discretionary, so could be a problem if we go into a recession. Runway is decent. Buy here around $18-20, and 17.25.

(Analysts’ price target is $23.25)