Sonos (SONO) Could Be Next Fitbit (i.e. - Takeover Bait) - DA Davidson

DA Davidson analyst Thomas Forte reiterated a Buy rating and $20.00 price target on Sonos Inc. (NASDAQ: SONO), saying it could be the next Fitbit which was recently acquired by Google.

Forte sees the company as a natural acquisition target for Apple (NASDAQ: APPL), given the similarities in: 1) product quality, 2) design acumen, and 3) premium brands.

"Just as Fitbit fills a void for Google when it comes to healthcare-related data, acquiring Sonos could materially advance Apple's connected home efforts (an area we believe it needs improvement and where its own product, the HomePod, was a disappointment)," Forte commented. "Lastly, we acknowledge that similar to Google with Fitbit, it may be difficult for Apple to get regulatory approval for thedeal as governments, globally, struggle with the amount of influence the four horsemen of big tech -Amazon, Apple, Facebook, and Google -have on consumers' lives."

In addition to a Apple deal, the company could go private. KKR remains one of its largest shareholders, the analyst notes. CFO, Brittany Bagley, had been on its Board prior to becoming CFO, and worked at KKR from 2017 to 2019.

While less obvious to us than Apple, Amazon could also be seen as a buyer of Sonos to advance its connected home efforts, similar to its acquisitions of Blink, eero, and Ring. That side, it may be difficult for this transaction to get regulatory approval, given Amazon's Echo smart speaker.

For an analyst ratings summary and ratings history on Sonos Inc. click here. For more ratings news on Sonos Inc. click here.

Shares of Sonos Inc. closed at $13.46 yesterday.

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