May. 5 at 1:49 PM
$SONO Morgan Stanley this morning: Equal weight; keeps
$18 price target, notes:
Key Takeaways
F1Q revenue outperformance a function of market share gains and success in Era
100 and Arc Ultra. Minimal Sonos Play contribution in 2Q.
International markets saw 2nd strongest quarter of growth in 5+ years, helping to offset sluggish US growth of just 2% Y/Y.
Memory cost headwinds are worsening, with 2Q GM's below low-end of guidance. Mgmt expects a 400bps Y/Y margin headwind in 3Q, growing in 4Q.
Cost efficiencies remain impressive, with opex flat Y/Y despite 8% Y/Y rev growth. We expect this to continue as one of a few memory inflation offsets.
Remain EW-rated as we balance improving topline trend and self-help story with tough macro, memory headwinds and risk of inconsistent consumer behavior
