After reporting better-than expected Q2 adjustedEPS and revenue, shares of Sonos (NASDAQ) were up over 5% Thursday in premarket trades

SoNO had an adjusted EPS (EPS) of 26c for the second quarter. This is down from 31c during the previous year, but higher than the consensus estimate of 17c per share. The revenue came to $399.8million, an increase of 20% YoY. This was higher than the analyst consensus estimate of $351.7 million. The adjusted EBITDA was $46.9 Million, which is 3.4% lower than the consensus projection (34.6 million).

Sonos estimates revenue to be between $1.95 billion-$2 billion for the entire fiscal year. Analysts had expected $1.98 billion. Analysts are expecting FY adjusted EBITDA to be between $290m and $310m, which is a significant increase from its prior forecast of $290m to $325m.

Sonos announced that it will launch Sonos Voice Control, a voice assistant function. It will be available for its users starting June 1. It also announced a low-cost, $279 ray soundbar.

Patrick Spence CEO at Sonos said, “Homes are becoming movie theatres, gyms, and gaming hubs,”

Rod Hall, an analyst at Goldman Sachs, reduced the price target from $32.00 for Neutral-rated SONO stock to $24.00 per shares. He was positive about the results.

“On the demand front, we note that the positive commentary from Sonos is consistent with that from Apple (NASDAQ:) and Qualcomm (NASDAQ:). This shows that even though there is weakness at the lower end, the high end consumer continues to be resilient. However, given world events and the risk of economic slowdown we remain on the sidelines on Sonos’ stock until the medium term trajectory of demand for their products becomes clearer,” Hall said in a client note.

BofA analyst John Babcock cut the price target to $34.00 per share from $35.00 but remains Buy-rated amid “solid” demand.

“SONO is continuing to experience better than-expected demand for its products. We noted that heading into earnings, the stock suggested a substantial drop in EBITDA. This was in line with our F2Q22 Preview. The stock also reflected both supply chain issues and growth. Ultimately, SONO’s results and latest guidance were supportive of our thesis… While we do see risk that demand could slow, we’d note that SONO should have good visibility on demand levels for F3Q and even into F4Q, giving us confidence in its guidance,” Babcock told clients.

By Senad Karaahmetovic