Sonos, Inc. — Earnings Quality Grade F
SONO · Technology
Major red flags
Screening Summary
Management Signals
Financial Trends
Revenue & Net Income ($B)
Margins (%)
18-Point Screening
Revenue Quality
DSO 17 days, change +6 days YoY
AR growth 47.9% exceeds revenue growth -4.9%
Revenue -4.9%, CFFO -27.9%. Cash follows revenue
Expense Quality
Inventory -26.1% vs COGS -1.9%. Normal
CapEx growth -48.1% vs revenue -4.9%. Normal
SG&A/Gross Profit = 60.8%. Normal
Gross margin 43.7%, change -1.7pp. Stable
Cash Flow Quality
CFFO < Net Income for 3 consecutive years
Small-cap context: Small-cap CFFO/NI often diverges from working-capital swings, not necessarily manipulation.
FCF $0.1B, FCF/NI = -1.77
Accruals ratio = -24.1%. Low accruals
Cash $0.2B covers debt $0.1B
Balance Sheet Health
Goodwill+Intangibles $0.2B = 45% of equity
Debt/EBITDA = 4.9x (>4x). Interest coverage = -70.9x (<2x). Financial stress
Other assets 3.9% vs revenue -4.9%. Normal
No write-off data
Acquisition Risk
FCF after acquisitions positive
Goodwill+Intangibles change -7% YoY. Normal
Manipulation Score
M-Score = -3.14 (< -2.22). Unlikely manipulator
Portfolio monitoring
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Beneish M-Score
Altman Z-Score
Generated from public financial data using forensic accounting frameworks. Not investment advice. Data: Yahoo Finance · 2026-04-25