It hasn't been the best quarter for Sonos, Inc. (NASDAQ:SONO) shareholders, since the share price has fallen 12% in that time. But at least the stock is up over the last five years. Unfortunately its return of 58% is below the market return of 100%. Unfortunately not all shareholders will have held it for five years, so spare a thought for those caught in the 54% decline over the last three years: that's a long time to wait for profits.

Since the long term performance has been good but there's been a recent pullback of 4.6%, let's check if the fundamentals match the share price.

Because Sonos made a loss in the last twelve months, we think the market is probably more focussed on revenue and revenue growth, at least for now. Generally speaking, companies without profits are expected to grow revenue every year, and at a good clip. That's because it's hard to be confident a company will be sustainable if revenue growth is negligible, and it never makes a profit.

For the last half decade, Sonos can boast revenue growth at a rate of 6.9% per year. That's a pretty good long term growth rate. While the share price has gained 10% per year for five years, that's hardly amazing considering the market also rose. You could even argue that the share price was over optimistic, previously.

The image below shows how earnings and revenue have tracked over time (if you click on the image you can see greater detail).

Take a more thorough look at Sonos' financial health with this free report on its balance sheet.

A Different Perspective

Sonos shareholders gained a total return of 9.8% during the year. But that return falls short of the market. The silver lining is that the gain was actually better than the average annual return of 10% per year over five year. This suggests the company might be improving over time. You could get a better understanding of Sonos' growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

We will like Sonos better if we see some big insider buys. While we wait, check out this free list of undervalued stocks (mostly small caps) with considerable, recent, insider buying.

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on American exchanges.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.