William Blair initiated research coverage of Snap One Holdings Corp. (SNPO $17.55), a leading vertically integrated supplier in the professionally installed connected home market.
Analysts Ryan Merkel and Matthew Pfau estimate the company could generate adjusted EPS of $0.53 in 2021 and $1.03 in 2022. Long term, management targets 13% organic sales growth and 15% organic EBITDA growth.
“Snap One is the leading global platform of smart solutions for homes and businesses and is the preferred supplier among professional integrators,” Merkel said. “It is a hybrid OEM/distributor as it designs, manufactures, and distributes proprietary SKUs and curated third-party products using an omnichannel network. Top categories include audio, video, security, and networking. It also offers control and workflow software that creates a powerful end-to-end ecosystem for professional integrators. Its ‘Only Here’ strategy delivers a unique value proposition that we believe is unmatched. In the evolving smart home market, Snap One has the scale, service, and talent to be disruptive.”
Pfau said, “The domestic ‘do it for me,’ or DIFM, smart home market is sized at $43 billion and is forecast to grow 9% through 2025. We believe the penetration of smart home products will accelerate over the next decade as consumers adopt technology to maximize safety, convenience, and comfort. In our view, DIFM will outgrow DIY due to product complexity and the highly customized nature of most jobs. In our view, Snap One has built an ecosystem that DIFM integrators want to build their businesses around. The Only Here strategy includes 2,800 proprietary SKUs, e-commerce tools with workflow solutions, Control4’s OS3 operating system, and OvrC remote management software. This ‘one-stop shop’ model allows integrators to deliver first-class service for complex home automation jobs.”
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Current Ratings Distribution (as of 8/22/21)
Outperform (Buy): 76%
Market Perform (Hold): 24%
Underperform (Sell): 1%
Inv. Banking Relationships*
Outperform (Buy): 31%
Market Perform (Hold): 13%
Underperform (Sell): 0%
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