Sonos, Inc. (SONO) shares rose more than 5% during Tuesday's session after Citron Research's Andrew Left appeared on Fox Business News saying that he has a long position. Left believes that the stock is a forgotten beneficiary of the COVID-19 lockdown and sees it as a potential acquisition target for Apple Inc. (AAPL) or Amazon.com, Inc. (AMZN).
Other analysts also see opportunity in Sonos stock. In April, Raymond James reiterated its Strong Buy and $19 price target, saying that Sonos Radio could drive meaningfully higher multiples due to the platform approach. Analyst Adam Tindle said that the stock currently trades on par with other "commodity consumer hardware plays" like GoPro, Inc. (GPRO).
On the other hand, some analysts believe that Sonos' premium market position could hurt demand. Goldman Sachs analyst Rod Hall downgraded the stock to Sell and lowered his price target from $20 to $7.50, saying that the company's products are generally at the top end of the pricing spectrum and there could be a "severe reduction" in speaker demand.
From a technical standpoint, Sonos stock broke out during Tuesday's session from its 200-day moving average to fresh highs that haven't been seen since February. The relative strength index (RSI) climbed into overbought territory with a reading of 71.31, but the moving average convergence divergence (MACD) remains in a bullish uptrend.
Traders should watch for some consolidation above the 200-day moving average over the coming sessions. If the stock rebounds higher, traders could see a move to retest reaction highs of around $17.00 made in early February. If the stock breaks down from the 200-day support level, traders could see a move lower toward trendline resistance at around $11.00.
The author holds no position in the stock(s) mentioned except through passively managed index funds.