Knowles (NYSE:KN) and Sonos (NASDAQ:SONO) are both small-cap computer and technology companies, but which is the better business? We will contrast the two companies based on the strength of their institutional ownership, risk, earnings, profitability, dividends, valuation and analyst recommendations.

Analyst Ratings

This is a summary of current recommendations and price targets for Knowles and Sonos, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Knowles 1 2 3 0 2.33
Sonos 0 3 3 0 2.50

Knowles currently has a consensus target price of $17.20, suggesting a potential upside of 19.78%. Sonos has a consensus target price of $22.83, suggesting a potential upside of 80.07%. Given Sonos’ stronger consensus rating and higher possible upside, analysts plainly believe Sonos is more favorable than Knowles.

Earnings and Valuation

This table compares Knowles and Sonos’ gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Knowles $744.20 million 1.74 $68.30 million $0.70 20.51
Sonos $992.52 million 1.28 -$14.21 million N/A N/A

Knowles has higher earnings, but lower revenue than Sonos.

Profitability

This table compares Knowles and Sonos’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Knowles 13.12% 6.08% 4.37%
Sonos N/A N/A N/A

Summary

Knowles beats Sonos on 5 of the 8 factors compared between the two stocks.

About Knowles

Knowles Corporation designs, manufactures, and sells micro-acoustic, audio processing, and precision device solutions to the mobile consumer electronics, industrial, defense, aerospace medical, and telecommunications markets worldwide. The company operates in two segments, Audio and Precision Devices. The Audio segment designs and manufactures audio products, including microphones and balanced armature speakers, signal processing technologies, and software and algorithms used in applications that serve the mobile, ear, and Internet of Things markets. This segment also offers analog and digital micro-electro-mechanical systems, and electret condenser and smart microphones; and ultrasonic sensors and acoustic processors, as well as transducer products used primarily in hearing health and headset applications. The Precision Devices segment designs and delivers engineered capacitors and radio frequency devices for technically demanding applications, such as power supplies, radar, medical implants, and satellites for the industrial, defense, aerospace, medical, and telecommunications markets. The company also provides single layer electronic components to the radio frequency device, microwave, telecommunication, fiber optics, defense, and aerospace markets. It sells its products directly to original equipment manufacturers and to their contract manufacturers and suppliers, as well as through distributors. Knowles Corporation was founded in 1946 and is headquartered in Itasca, Illinois.

About Sonos

Sonos, Inc., through its subsidiaries, designs, develops, manufactures, and sells multi-room audio products primarily for use in private residences in the United States and internationally. It offers wireless speakers, home theater speakers, and components. The company offers its products through third-party retail stores and e-commerce retailers, as well as through its sonos.com Website. The company was formerly known as Rincon Audio, Inc. and changed its name to Sonos, Inc. in May 2004. Sonos, Inc. was founded in 2002 and is headquartered in Santa Barbara, California.

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