{"id":62194,"date":"2024-09-26T13:37:35","date_gmt":"2024-09-26T13:37:35","guid":{"rendered":"https:\/\/efimarkets.com\/blog\/?p=62194"},"modified":"2024-09-26T13:39:20","modified_gmt":"2024-09-26T13:39:20","slug":"sonos-shares-drop-following-double-downgrade-by-morgan-stanley","status":"publish","type":"post","link":"https:\/\/bhimmarkets.com\/blog\/sonos-shares-drop-following-double-downgrade-by-morgan-stanley\/","title":{"rendered":"Sonos Shares Drop Following Double Downgrade by Morgan Stanley"},"content":{"rendered":"\t\t<div data-elementor-type=\"wp-post\" data-elementor-id=\"62194\" class=\"elementor elementor-62194\">\n\t\t\t\t\t\t\t<div class=\"elementor-element elementor-element-532cd4b e-con-boxed e-flex e-con\" data-id=\"532cd4b\" data-element_type=\"container\" data-settings=\"{&quot;content_width&quot;:&quot;boxed&quot;}\">\n\t\t\t\t\t<div class=\"e-con-inner\">\n\t\t\t\t<div class=\"elementor-element elementor-element-c2a90bf elementor-widget elementor-widget-image\" data-id=\"c2a90bf\" data-element_type=\"widget\" data-widget_type=\"image.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t<style>\/*! elementor - v3.13.0 - 24-04-2023 *\/\n.elementor-widget-image{text-align:center}.elementor-widget-image a{display:inline-block}.elementor-widget-image a img[src$=\".svg\"]{width:48px}.elementor-widget-image img{vertical-align:middle;display:inline-block}<\/style>\t\t\t\t\t\t\t\t\t\t\t\t\t<a href=\"https:\/\/www.investing.com\/\">\n\t\t\t\t\t\t\t<img decoding=\"async\" loading=\"lazy\" width=\"450\" height=\"322\" src=\"https:\/\/bhimmarkets.com\/blog\/wp-content\/uploads\/2024\/09\/s.jpg\" class=\"attachment-large size-large wp-image-62198\" alt=\"Sonos Shares Drop\" srcset=\"https:\/\/bhimmarkets.com\/blog\/wp-content\/uploads\/2024\/09\/s.jpg 450w, https:\/\/bhimmarkets.com\/blog\/wp-content\/uploads\/2024\/09\/s-300x215.jpg 300w\" sizes=\"(max-width: 450px) 100vw, 450px\" \/>\t\t\t\t\t\t\t\t<\/a>\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t<div class=\"elementor-element elementor-element-c3d98c8 e-con-boxed e-flex e-con\" data-id=\"c3d98c8\" data-element_type=\"container\" data-settings=\"{&quot;content_width&quot;:&quot;boxed&quot;}\">\n\t\t\t\t\t<div class=\"e-con-inner\">\n\t\t\t\t<div class=\"elementor-element elementor-element-0c7f68a elementor-widget elementor-widget-text-editor\" data-id=\"0c7f68a\" data-element_type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t<style>\/*! elementor - v3.13.0 - 24-04-2023 *\/\n.elementor-widget-text-editor.elementor-drop-cap-view-stacked .elementor-drop-cap{background-color:#69727d;color:#fff}.elementor-widget-text-editor.elementor-drop-cap-view-framed .elementor-drop-cap{color:#69727d;border:3px solid;background-color:transparent}.elementor-widget-text-editor:not(.elementor-drop-cap-view-default) .elementor-drop-cap{margin-top:8px}.elementor-widget-text-editor:not(.elementor-drop-cap-view-default) .elementor-drop-cap-letter{width:1em;height:1em}.elementor-widget-text-editor .elementor-drop-cap{float:left;text-align:center;line-height:1;font-size:50px}.elementor-widget-text-editor .elementor-drop-cap-letter{display:inline-block}<\/style>\t\t\t\t<h3><span style=\"color: #000000;\">Sonos Shares Drop After Morgan Stanley&#8217;s Double Downgrade<\/span><\/h3><p><span style=\"color: #000000;\">Sonos Shares Drop on Thursday after Morgan Stanley analysts downgraded the stock from Overweight to Underweight. The downgrade reflects concerns about the financial impact of Sonos&#8217; recent app redesign.<\/span><\/p><h3><span style=\"color: #000000;\">Financial Impact of the App Redesign<\/span><\/h3><p><span style=\"color: #000000;\">In May 2024, Sonos launched a redesigned app to improve user experience. However, the redesign received heavy criticism from existing users, forcing Sonos&#8217; CEO to apologize and delay upcoming product launches.<\/span><\/p><p><span style=\"color: #000000;\">Morgan Stanley analysts lowered their fiscal year 2025 revenue and EBITDA projections by 5% and 13%, respectively. They also reduced the stock&#8217;s price target from $25 to $11.<\/span><\/p><h3><span style=\"color: #000000;\">Stock Valuation Concerns<\/span><\/h3><p><span style=\"color: #000000;\">Despite these issues, <strong>Sonos shares rose initially<\/strong>, driven by broader market trends. Analysts pointed out that the stock&#8217;s valuation now sits nearly one standard deviation above its historical average, which they consider excessive.<\/span><\/p><p><span style=\"color: #000000;\">\u201cWe believe this divergence between valuation and fundamentals is unwarranted,\u201d they said, citing declining net promoter scores and brand favorability. Analysts expect the negative impact on Sonos users to continue into FY25, which isn&#8217;t fully reflected in current market estimates.<\/span><\/p><h3><span style=\"color: #000000;\">Declining User Engagement and Growth<\/span><\/h3><p><span style=\"color: #000000;\">Sonos has historically relied on its ecosystem for growth, with repeat purchases and word-of-mouth referrals driving new customer acquisition. However, user engagement dropped to pre-COVID levels, and new user growth declined 9% year-over-year. Sonos\u2019 recent product, Sonos Ace, also underperformed, further limiting market expansion.<\/span><\/p><h3><span style=\"color: #000000;\">Challenges Ahead for Sonos<\/span><\/h3><p><span style=\"color: #000000;\">Morgan Stanley expects Sonos to face tougher challenges in the near-to-medium term than the market anticipates. Ongoing struggles in the audio market, coupled with underperforming products, make it unlikely that Sonos will achieve consistent 10% revenue growth or 20% EBITDA growth in the near future.<\/span><\/p><h5><span style=\"color: #000000;\"><strong>Trade Anytime, Anywhere with EFI Markets<\/strong><\/span><\/h5><p><span style=\"color: #000000;\">EFI Markets is a trusted\u00a0<\/span><a href=\"https:\/\/efimarkets.com\/stocks\">stock market trading platform<\/a><span style=\"color: #000000;\">,\u00a0making trading easy with its efficient interface and a variety of tools and features.<\/span><\/p>\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t\t\t<\/div>\n\t\t","protected":false},"excerpt":{"rendered":"<p>Sonos Shares Drop After Morgan Stanley&#8217;s Double Downgrade Sonos Shares Drop on Thursday after Morgan Stanley analysts downgraded the stock from Overweight to Underweight. The downgrade reflects concerns about the financial impact of Sonos&#8217; recent app redesign. Financial Impact of the App Redesign In May 2024, Sonos launched a redesigned app to improve user experience. &hellip;<\/p>\n<p class=\"read-more\"> <a class=\"\" href=\"https:\/\/bhimmarkets.com\/blog\/sonos-shares-drop-following-double-downgrade-by-morgan-stanley\/\"> <span class=\"screen-reader-text\">Sonos Shares Drop Following Double Downgrade by Morgan Stanley<\/span> Read More &raquo;<\/a><\/p>\n","protected":false},"author":1,"featured_media":62198,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"site-sidebar-layout":"default","site-content-layout":"default","ast-global-header-display":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","theme-transparent-header-meta":"default","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","footnotes":""},"categories":[12,3],"tags":[20,14,5,34,18],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v20.5 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Sonos Shares Drop Following Double<\/title>\n<meta name=\"description\" content=\"Sonos shares drop sharply after Morgan Stanley 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