Critical Review: Sonos (SONO) & Universal Electronics (UEIC)

Sonos (NASDAQ:SONO) and Universal Electronics (NASDAQ:UEIC) are both small-cap consumer discretionary companies, but which is the better stock? We will contrast the two businesses based on the strength of their risk, dividends, profitability, earnings, valuation, institutional ownership and analyst recommendations.

Analyst Ratings

This is a summary of recent ratings and price targets for Sonos and Universal Electronics, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Sonos 0 3 3 0 2.50
Universal Electronics 0 3 0 0 2.00

Sonos currently has a consensus price target of $22.83, indicating a potential upside of 58.45%. Universal Electronics has a consensus price target of $52.00, indicating a potential upside of 33.68%. Given Sonos’ stronger consensus rating and higher possible upside, equities analysts plainly believe Sonos is more favorable than Universal Electronics.

Earnings and Valuation

This table compares Sonos and Universal Electronics’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Sonos $992.52 million 1.45 -$14.21 million N/A N/A
Universal Electronics $695.79 million 0.77 -$10.32 million $2.81 13.84

Universal Electronics has lower revenue, but higher earnings than Sonos.

Profitability

This table compares Sonos and Universal Electronics’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Sonos N/A N/A N/A
Universal Electronics 1.02% 15.77% 7.11%

Summary

Sonos beats Universal Electronics on 5 of the 9 factors compared between the two stocks.

About Sonos

Sonos, Inc., through its subsidiaries, designs, develops, manufactures, and sells multi-room audio products primarily for use in private residences in the United States and internationally. It offers wireless speakers, home theater speakers, and components. The company offers its products through third-party retail stores and e-commerce retailers, as well as through its sonos.com Website. The company was formerly known as Rincon Audio, Inc. and changed its name to Sonos, Inc. in May 2004. Sonos, Inc. was founded in 2002 and is headquartered in Santa Barbara, California.

About Universal Electronics

Universal Electronics Inc. develops and manufactures pre-programmed and universal control products, audio-video (AV) accessories, software and intelligent wireless security products, and sensing and automation components for home entertainment and automation systems. The company offers universal infrared and radio frequency (RF) remote controls; integrated circuits on which its software and universal device control database is embedded; and software, firmware, and technology solutions that enable devices, including televisions, set-top boxes, audio systems, smartphones, tablets, game controllers, and other consumer electronic devices to wirelessly connect and interact with home networks, as well as interactive services to control and deliver digital entertainment and information. It also provides proprietary and standards-based RF sensors designed for residential security, safety, and automation applications; AV accessories; and wall-mount and handheld thermostat controllers, and connected accessories for intelligent energy management systems. In addition, the company licenses intellectual property comprising its patented technologies, trademarks, and database of home connectivity software and control codes. It serves cable and satellite television service providers, and original equipment manufacturers; software development companies; subscription broadcasting providers; hospitality system integrators; and retail, private label, pro-security installation, and personal computing companies. The company sells its products directly, as well as through distributors in the United States, Europe, Australia, New Zealand, South Africa, the Middle East, Mexico, Latin America, the People's Republic of China, various countries in Asia, and internationally under the One For All and Nevo brands. Universal Electronics Inc. was founded in 1986 and is headquartered in Santa Ana, California.

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