Sonos (SONO -0.29%) went public in Aug. 2018 at $15 per share, and more than a year later, the high-end sound system specialist is still trading below its IPO price.

The consumer electronics company was greeted with skepticism by bears who doubted whether Sonos speakers could withstand the onslaught of competition from (AMZN 0.58%), Apple, Alphabet's (GOOG 1.06%), (GOOGL 1.08%) Google, and the numerous other smart-speaker makers.

Even though it has clawed its way back to almost breakeven and now sits 50% above its lowest point, the deficit between where it started and where it is today represents a great opportunity for investors.

Man listening to music

Sonos sounds like an enormous opportunity for growth. Image source: Getty Images.

Expanding its audience

Because Alexa-enabled devices are so widespread, and because they and the Google Home Mini speakers are available at such low cost, the comparatively expensive Sonos speaker lineup was at a distinct disadvantage.

The new game plan of offering more accessible products to consumers is supposed to help Sonos grow beyond the confines of the box where Amazon and others were cornering it. The new strategy also means investors should take notice, regardless of whether it is a natural acquisition target for Apple or anyone else.

For example, its partnership with Swedish furniture maker IKEA is beginning to pay dividends. The two paired up to introduce low-cost speakers disguised as household products, namely a lamp and a shelf, in a bid to appeal to a younger demographic that might not have the financial wherewithal for a high-end sound system.

Growth from Sonos' Asia Pacific region, where the company recognizes revenue from its Ikea partnership, soared to 163% in the most recent quarter, on top of the 168% year-over-year growth it enjoyed last quarter.

Similarly, Sonos' new equipment rental program also holds promise for attracting new customers. It is a gateway to audiophiles looking for an enhanced sound experience without laying out significant sums of money up front. And they're always guaranteed to have the latest equipment upgrade when it becomes available. The program creates new avenues for consumers to come to its products.

Making waves for years

And now, Sonos has made its first acquisition as a public company: Snips, the artificial intelligence (AI) platform for connected devices. The acquisition isn't for Sonos to go after Amazon or Google in AI-assisted smart speakers, especially since both are available on Sonos speakers, but it will help Sonos better cater to its customers with more music-focused offerings and with privacy in mind.

The difference between Snips and Alexa or Google Assistant is that the voice-learning capabilities are built into the Snips devices and don't need to be uploaded to the cloud. A lot has been made of Amazon employees listening in to private conversations; for individuals concerned about privacy, Snips could allay those concerns.

These are the sorts of smart, consumer-oriented decisions that have continued to push Sonos sales higher. Despite Alexa's omnipresence over the past few years, Sonos has still grown sales 10% or more each year for over a decade, and that's in the face of Echo Dots being sold at deeply discounted prices, Alexa being added to products across the spectrum, and Sonos' own higher price points for its products.

Sonos speakers are flourishing in spite of Amazon's ubiquity, or maybe even because of it. Consumers seeking out a better audio experience are coming to Sonos, and now that it is devising ways to meet them halfway, we may just see that sales growth accelerate.

Moving forward

Although Sonos fiscal fourth-quarter earnings missed analyst expectations, the results still represent an otherwise solid performance for the sound specialist. Revenue of $294.2 million was up 8% from the year-ago period as it sold over 1.5 million products, a 38% gain.

That was mostly driven by its Sonos One smart speakers and the introduction of Move, its battery-powered portable speaker. Wireless-speaker revenue surged 25% to almost $117 million. Those gains came on top of the 27% jump in revenue it recorded last year, and exceeded even its own guidance from last quarter.

Sonos has maintained its goal is to average 10% revenue and 20% EBITDA growth annually, and it exceeded those targets in fiscal 2019.

Music to my ears

Sonos looks like a promising investment opportunity, particularly with its still-depressed stock price. The sound specialist does face risks, such as Amazon trying to move up in quality with the introduction of its Studio speaker that's meant to service its premium music-streaming service, but these are manageable for the company that has well over a decade of experience in quality audio.

By making its own products more accessible, Sonos can expand its addressable market -- already encompassing nine million homes -- as it grows into profitability. There's good reason to believe it's only just beginning to crank up the volume.