The consumer electronics industry is rapidly widening in scope and scale, driven by the increasing adoption of smart devices such as smartphones, smartwatches, fitness trackers, and home devices. Further, continuous innovations in technology like generative AI, the Internet of Things (IoT), augmented reality and virtual reality (AR&VR), and 5G.
Given the industry tailwinds, it could be wise to watch fundamentally sound consumer electronics stocks Apple Inc. (AAPL), Sonos, Inc. (SONO), and Universal Electronics Inc. (UEIC) for potential gains.
The consumer electronics industry encompasses an extensive array of products catering to diverse aspects of modern life, from entertainment and communication to productivity and health monitoring. At its core, the industry drives innovation and accessibility, constantly evolving to meet the demands of consumers worldwide.
The U.S. and China are the world’s largest consumers of such products, with a combined consumer electronics revenue of more than $350 billion.
This year, the consumer electronics industry is poised to be significantly influenced by the rising prevalence of generative AI, deepening integration of the connected world and IoT, and the 5G revolution. As consumer expectations for speed and reliability continue to rise, these advancements will drive innovation and shape the future of connected devices and smart technologies.
In 2024, revenue in the consumer electronics market in the U.S. is expected to total $159.90 billion. The global consumer electronics market is projected to reach $815.16 billion in 2024. The market is expected to value $1.47 trillion by 2032, growing at a CAGR of 7.6%, driven by the advent of technology and digitalization.
Given the industry’s robust outlook, it could be wise to keep an eye on quality consumer electronics stocks such as AAPL, SONO, and UEIC for future gains.
Apple Inc. (AAPL)
AAPL designs, manufactures, and markets smartphones, personal computers, tablets, wearables, and accessories globally. It offers the iPhone, a line of smartphones; Mac, a line of personal computers; iPad, a line of multi-purpose tablets; and wearables, home, and accessories comprising AirPods, Apple TV, Apple Watch, Beats products, and HomePod.
On June 10, AAPL unveiled Apple Intelligence, the personal intelligence system for iPhone, iPad, and Mac, which combines the power of generative models with personal context to deliver intelligence that’s incredibly useful and relevant and is deeply integrated into iOS 18, iPadOS 18 and macOS Sequoia.
Apple Intelligence harnesses the power of Apple silicon to understand and create language and images, take action across apps, and draw from personal context to simplify and accelerate everyday tasks. With its unique approach, AAPL combines generative AI with a user’s context to deliver truly helpful intelligence.
Also, on the same day, AAPL launched a suite of innovative new tools and resources to allow developers globally to design more powerful and efficient apps across all Apple platforms. With Xcode 16 beta, developers can save time in their development process and access features like Swift Assist and predictive code completion.
AAPL reported total net sales of $90.75 billion during the second quarter that ended March 30, 2024, of which Services net sales increased 14.2% year-over-year to $23.87 billion. The company’s net income and EPS came in at $23.64 billion and $1.53 for the quarter, respectively.
Furthermore, the company’s cash and cash equivalents stood at $32.69 billion as of March 31, 2024, versus $29.96 billion as of September 30, 2023.
Analysts expect AAPL’s revenue for the third quarter (ending June 2024) to increase 2.3% year-over-year to $83.67 billion, and its EPS for the ongoing quarter is expected to grow 4.9% year-over-year to $1.32. Moreover, the company has topped the consensus EPS estimates in each of the trailing four quarters.
Shares of AAPL have surged 12.3% over the past month and 15.8% over the past year to close the last trading session at $214.29.
AAPL’s POWR Ratings reflect this robust outlook. The POWR Ratings are calculated by considering 118 different factors, with each factor weighted to an optimal degree.
AAPL has an A grade for Quality. It is ranked #23 out of 38 stocks in the B-rated Technology - Hardware industry.
In addition to the POWR Ratings we’ve stated above, we also have other ratings of AAPL for Sentiment, Value, Growth, Momentum, and Stability. Get all AAPL ratings here.
Sonos, Inc. (SONO)
SONO designs, develops, manufactures, and sells audio products and services internationally. It offers wireless, portable, and home theater speakers, components, and accessories. It offers its products through nearly 10,000 third-party retail stores, like custom installers of home audio systems and e-commerce retailers, and through its website.
On May 21, SONO launched its first-ever headphones, Sonos Ace, and marked the brand’s long-awaited entry into the personal listening category. Sonos Ace offers stunning sound, sleek design, and long-standing comfort to one of the largest and most popular audio categories worldwide.
On April 23, SONO revealed its most extensive app redesign to create an unprecedented streaming experience enabling listeners to organize their favorite playlists, stations, albums, and more from over 100 services on one customizable home screen.
The modernized app and platform put listeners in the driver's seat with a personalized experience to make listening easier, faster, and better.
During the second quarter that ended March 30, 2024, SONO reported revenue of $252.66 million, and its non-GAAP gross profit was $113.70 million. Its total other income increased 157.9% from the year-ago value to $508 thousand. Its cash and cash equivalents stood at $245.96 million as of March 30, 2024, compared to $220.23 million as of September 30, 2023.
According to the fiscal year 2024 outlook, SONO expects its revenue to range from $1.60 billion to $1.70 billion. Also, the company’s adjusted EBITDA is expected to be between $150 million and $180 million.
Street expects SONO’s revenue for the third quarter (ending June 2024) to increase 4.8% year-over-year to $391.24 million, while its EPS for the current quarter is expected to grow 6.2% year-over-year to $0.17. Furthermore, the company surpassed the consensus revenue estimates in each of the trailing four quarters.
SONO’s stock has soared 15.2% over the past nine months to close the last trading session at $14.79.
SONO’s sound fundamentals are reflected in its POWR Ratings. The stock has a B grade for Value and Quality. Within the Technology - Electronics industry, SONO is ranked #27 out of 44 stocks.
Click here to access additional ratings of SONO for Sentiment, Momentum, Growth, and Stability.
Universal Electronics Inc. (UEIC)
UEIC designs, develops, manufactures, ships, and supports control and sensor technology solutions internationally. It provides voice-enabled, automatically-programmed universal two-way radio frequency and infrared remote controls to video service providers, original equipment manufacturers (OEMs), retailers, and private label customers.
On January 11, UEIC released its latest QuickSet® solution, which now expanded content discovery, control, and interaction across millions of devices and households. QuickSet Cloud now discovers more devices, ranging from entertainment devices to other smart home device categories across multiple protocols.
The latest release of QuickSet expanded its functionality for entertainment and whole home audio use cases to provide deeper device and content history across an ever-increasing landscape of devices and services in the home.
On January 10, UEIC introduces its family of UEI Butler™ Smart Home Control Hubs. The products, powered by QuickSet® Cloud, align with UEIC’s product and technology strategy to enable Discovery, Control, and Interaction across disparate connected devices in the home to create smarter living for a growing list of smart home B2B customers.
For the first quarter that ended March 31, 2024, UEIC posted net sales of $91.90 million, and its gross profit rose 5.2% from the year-ago value to $25.99 million. Its cost of sales decreased 21.2% year-over-year to $65.91 million. Its cash and cash equivalents and total current assets came in at $26.91 million and $230.23 million as of March 31, 2024, respectively.
As per its second-quarter 2024 outlook, UEIC expects adjusted non-GAAP net sales between $90 million and $100 million.
Analysts expect UEIC’s revenue and EPS for the third quarter (ending September 2024) to increase 1.5% and 170.8% year-over-year to $108.69 million and $0.22, respectively. Moreover, the company topped the consensus EPS estimates in all four trailing quarters.
UEIC’s stock has surged 33.7% over the past six months and 35% over the past year to close the last trading session at $11.00.
UEIC’s POWR Ratings reflect its bright prospects. The stock has an overall rating of B, equating to a Buy in our proprietary rating system.
UEIC has a B grade for Value and Sentiment. The stock is ranked #4 among 44 stocks in the Technology - Electronics industry.
To access UEIC’s other ratings for Momentum, Stability, Growth, and Quality, click here.
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AAPL shares fell $0.29 (-0.14%) in premarket trading Thursday. Year-to-date, AAPL has gained 11.41%, versus a 15.75% rise in the benchmark S&P 500 index during the same period.
About the Author: Rjkumari Saxena
Rajkumari started her career as a writer but gradually shifted her focus to financial journalism, leveraging her educational background in Commerce. Fascinated by the interplay of business and economic shifts in equities, she aspires to evolve as an analyst. With a knack for simplifying complex financial concepts, her mission is to empower investors with insights that lead to profitable decisions.
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