Find a public company listed on NYSE or NASDAQ. The stock should have a closing

Question

Find a public company listed on NYSE or NASDAQ. The stock should have a closing price above $10 and a negative return (< -5%) from past year. You can get performance data from websites like finance.google.com, finance.yahoo.com, or morningstar.com. You can ignore any request for subscription. The free data would suffice the project need.

Review at least two major investment (capital budgeting) decisions by the company.

Explain how those decisions had affected the past performances.

Or explain how those decisions could improve the future performance.

Follow the guide in the appendix to collect financial data from www.morningstar.com (Links to an external site.)Links to an external site.. Instead of calculating the financial ratios, you can use the downloaded data file for analysis.

Review and analyze the financial indicators and ratio on the following categories. Focus on how the financials change over time (for example, last two or three years.)

Financials: Revenue, Net Income, Payout ratio %, Free cash flow, Working capital

Key ratio -> Profitability: Gross margin, Net Margin ­%, Asset turnover, Reutrn on Assets, Financial leverage, Return on Equity

Key ratio -> Growth: 3, 5, 10-year Revenue %, Operating Income %, Net Income %

Key ratio -> Cash Flow: Free cash flow / Sales %, Free cash flow/Net Income

Key ratio -> Financial health: Total Current Assets, Total asset, Long-term debt, Total stockholders’ Equity

Liquidity/Financial Health: Current ratio, Quick ratio, Financial Leverage, D/E ratio

Key ratio -> Efficiency Ratios: Receivables Turnover, Inventory Turnover, Fixed asset turnover, Asset turnover

Explain whether the change of financial ratios can explain the stock performance. For example, a decreasing Return on Equity could cause negative stock returns.)

Explain how the financial data can support the investment decisions. For example, cost cutting decision would increase the net profit margin.

Based on the above analysis, comment on the investment value of the stock. In particular, shall we invest in the stock?

You should copy the data as a table and add your analysis and comment.

Explanation / Answer

About the company: (Source: wikipedia)
Sonos is an American consumer electronics company founded in 2002 by John MacFarlane, Craig Shelburne, Tom Cullen and Trung Mai, based in Santa Barbara, California. Sonos is widely known for the smart speakers it develops and manufactures.

Scope for future projects and new product releases: (Source: Wikipedia)

MacFarlane introduced a prototype at the 2004 Consumer Electronics Show, which was released in 2005 as a bundle called the Digital Music System. The company expanded upon the prototype and product design, adding mesh networking with AES encryption to allow the speakers to play music simultaneously in multiple rooms. Between 2011 and 2014, the company released numerous speakers and added more services. They worked with Bruce Mau Design to incorporate a rebrand of the company, which took effect in 2015. The company has partnered with other companies adding to their catalog of services, including iHeartRadio, Spotify, MOG, QQ Music, and Amazon Music.
They are also partnering with Amazon to enable Alexa to control Sonos speakers, intending to eventually work with every voice assistant on the market. Google Assistant will also be supported by Sonos in 2018.

The company opened its own local studio and art museum, the Sonos Studio, in May 2011 as well as an official Sonos Store in SoHo in July 2016.

Source: from wikipedia
Sonos Inc.

Type: Public

Traded as: NASDAQ: SONO

Industry   Consumer electronics

Founded   2002; 16 years ago
Founder   •   John MacFarlane
•   Craig Shelburne
•   Tom Cullen
•   Trung Mai
Headquarters   Santa Barbara, California,United States

Number of locations   •   12 offices
•   3 retail stores
Area served   Worldwide
Key people   •   Patrick Spence
•   (Chief Executive Officer)
•   Michael Giannetto
•   (Chief Financial Officer)
•   David Perri
•   (Chief Operations Officer)
•   Nicholas Millington
•   (Chief Product Officer)
Number of employees   1,450 (2018)
Website   www.sonos.com

Recent news: (Source: https://www.marketwatch.com/story/sonos-ipo-5-things-to-know-about-the-maker-of-high-end-speakers-2018-07-07)

Recent news:Source: https://www.crunchbase.com/organization/sonos/timeline/timeline
Sep 11, 2018
Sonos: The Informationist — Sonos Shares Tank on First Earnings Report
Sep 11, 2018
Sonos: TechCrunch — Investors are tuning out Sonos after a disappointing quarter
Sep 11, 2018
Sonos: The Verge — Sonos speakers now work with IFTTT so you can automate your music
Sep 10, 2018
Sonos: Mobile Syrup — Sonos is about to get a lot smarter with IFTTT support
Sep 10, 2018
Sonos: WebWire Headlines — Opening of new Sonos operation in Waalwijk
Sep 10, 2018
Sonos: Android Police — IFTTT gets Sonos support at last, also adds new channels for Anyware Services and Mui
Sep 6, 2018
Sonos: The Verge — Microsoft brings Alexa support to Xbox One for Kinect-like voice controls
Aug 30, 2018
Sonos: Pocket Lint — Harman Kardon Enchant wants to lure you away from the Sonos Playbar
Aug 29, 2018
Sonos: The Verge — Sonos is partnering with Sonance to build ceiling, in-wall, and outdoor speakers
Aug 29, 2018
Sonos: Tech Radar — Sonos Amp revealed - new, redesigned amp for the connected age
Aug 29, 2018
Sonos: iPhone in Canada — Sonos Unveils New Amp with AirPlay 2, Developer Program and More
Aug 29, 2018
Sonos: TechCrunch — Sonos releases new speaker Amp, partners with Sonance for in-wall speakers
Aug 21, 2018
Sonos: Android Headlines — Deal: Refurbished Sonos PLAY:1 For $119, PLAY:3 for $199 – August 2018
Aug 21, 2018
Sonos: Pocket Lint — Flexson builds premium accessories for Sonos, we explored the range
Aug 17, 2018
Sonos: Fortune — Sonos CEO Says "Caring Candor" is a Winning Leadership Formula
Aug 16, 2018
Sonos: SoCal - Tech — Wired Looks At The Early Days Of Sonos
Aug 13, 2018
Sonos: Android Central — Best Alexa-enabled speakers of 2018
Aug 10, 2018
Sonos: The Verge — Alexa’s Announcement broadcast feature comes to Sonos speakers and more
Aug 9, 2018
Sonos: Mobile Syrup — Sonos One and Sonos Beam speakers in Canada now support Alexa Announcements
Aug 9, 2018
Sonos: The Street — Jim Cramer on What's Next for Sonos After Its IPO
Aug 9, 2018
Sonos: The Street — Sonos Needs to Turn Up the Volume on Some Bullish Traders
Aug 9, 2018
Sonos: Tech Radar — Sonos smart speakers gain one more awesome Alexa skill
Aug 9, 2018
Sonos: The Street — Rewind: Jim Cramer on Roku, Rite Aid, Sonos, Amazon and Goldman Sachs
Aug 7, 2018
Sonos: Law Technology Review — Fenwick Helps Former Wilson Sonsini Lawyer Take Smart Speaker Startup Public
Aug 5, 2018
Sonos: iPhone in Canada — Why the Sonos Play:1 Speaker Does Not Support AirPlay 2
Aug 3, 2018
Sonos: Droid Life — Sonos May Finally Get Google Assistant for a Holiday Push
Aug 3, 2018
Sonos: CNBC — Sonos pops 15% then settles to modest gains a day after its market debut
Aug 3, 2018
Sonos: PitchBook Blog — KKR-backed Sonos sees stock surge following IPO
Aug 3, 2018
Sonos: Pando Daily (US) — Sonos' IPO: A first day pop, but can it fight off Apple, Amazon et al and win for the long term?
Aug 3, 2018
Sonos: TechCrunch — Cisco buys Duo, Brandless raises $240M, and Apple broaches $1T
Aug 2, 2018
Sonos: Mobile Syrup — Sonos redesigned the Nasdaq Bell sound to mark IPO filing
Aug 2, 2018
Sonos: Variety - Digital — Sonos Stock Up 22% as Company Debuts on Nasdaq
Aug 2, 2018
Sonos: WSJ Blogs — Sonos Backers Index, Redpoint Settle In for Below-Ran

Source: From wikipedia
Products:
he company currently offers seven powered speakers: four smart speakers (ONE, PLAY:1, PLAY:3 and PLAY:5), two soundbars (PLAYBAR and BEAM), a television sound system (PLAYBASE), and a subwoofer (SUB). It also offers the CONNECT:AMP to drive unpowered speaker pairs and the CONNECT to link a Sonos system to conventional audio equipment such as amplifiers and CD players. A key feature of whole house systems starting in 2017 was the adoption ofAmazon's Alexa as a third-party voice controller. An updated version of the Sonos Amp was unveiled in August 2018, with a planned limited release in December.
Multiple Sonos devices in a single household are connected to each other wirelessly or through a wired ethernet network or a mixture of the two. The Sonos system creates a proprietary AES-encrypted peer-to-peer mesh network, known as SonosNet. This allows for each unit to play any chosen input and if desired share it as synchronized audio with one or more other chosen zones. A single ZonePlayer or ZoneBridge must be wired to a network for access to LAN and Internet audio sources when using this feature, or when creating a 3.1/5.1 surround setup. SonosNet 2.0 integrates MIMO on 802.11n hardware, providing a more robust connection. Sonos does not implement wake-on-wireless technology, instead requiring that every Sonos player or bridge constantly maintains a wireless connection, even when in standby mode or connected by cable. The mesh network maintains signal in digital form throughout transfers, only converting to analog at the speaker endpoint, which was a distinguishing feature versus, for instance, Bose and Squeezebox as of 2009. Sonos devices do not have power buttons, and the company claims that each speaker consumes 4-8W in idle/standby.
Sonos previously offered 2 dedicated handheld controllers. Sales of the more recent CR200 controller were discontinued in 2012.. Existing CR200 controllers continue to operate, however there are reports of touchscreen failures which cannot be repaired.. The previous CR100 ceased being supported in April 2018.

Tabular Analysis as below:

Company is recently listed on NASDAQ on 2-Aug-2018. As it is world leader, and collaborating with new technology platforms like Google Assistant, and expanding its supply chain with tie-ups to supply raw material for its products manufacturing, one must invest in this stock for long-term appreciation.

Effect of news on the price is listed above since its listing on NASDAQ. Change in -7% since listing is due to disappointment in earnings. As the company is in its nascent stage, with very few public firm copetitors, it has good scope for growth, which we can see from the key ratios like: increasing Net and gross margins, increasing ROA, ROE (though still in negative, but improving %s)

Financial data source: Yahoo Finance

Date Adj Close News 2017 2016 2015 8/2/2018 19.91 Sonos stock up 22% as company debuts on NASDAQ Total Revenue 992,526,000 901,284,000 843,524,000 8/3/2018 20.95 Gross Income 456,065,000 403,399,000 382,137,000 8/6/2018 19.35 Gross Margin 45.95% 44.76% 45.30% 8/7/2018 19.15 Net Income -14,217,000 -38,214,000 -68,777,000 8/8/2018 18.14 Net Margin -1.43% -4.24% -8.15% 8/9/2018 16.69 Operating Income -15,609,000 -30,873,000 -55,748,000 8/10/2018 18.49 Op Income % -1.57% -3.43% -6.61% 8/13/2018 null 8/14/2018 null Total Current Assets 301,469,000 183,403,000 0 8/15/2018 null Inventory 113,856,000 53,562,000 0 8/16/2018 null Total Assets 400,020,000 278,879,000 0 8/17/2018 null Total Current Liabilities 223,266,000 151,537,000 0 8/20/2018 19.42 Long term debt 39,600,000 24,501,000 0 8/21/2018 20.08 Flexson also makes accessories for your larger Sonos equipment Total stockholder equity 27,000 -28,788,000 8/22/2018 21.69 ROA -3.55% -13.70% 8/23/2018 20.83 ROE -52655.56% 132.74% 8/24/2018 20.21 Current ratio 135.03% 121.03% 8/27/2018 18.92 Debt/Equity 146666.67% -85.11% 8/28/2018 20.17 Partnered with Sonance to build ceiling, in-wall, and outdoor speakers 8/29/2018 19.22 8/30/2018 18.88 8/31/2018 19.26 9/4/2018 19.19 9/5/2018 18.98 9/6/2018 18.21 9/7/2018 18.75 9/10/2018 21.24 Company partners with other platforms (like Google Assistant) to improve the experience for users 9/11/2018 16.56 Investors turning out from Sonos, after a disappointing quarter 9/12/2018 17.16 9/13/2018 16.72 9/14/2018 16.65 9/17/2018 15.2 9/18/2018 14.13

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