Purple Innovation (PRPL) AI Stock Analysis

• Market Cap: $80.64M
• Dividend Yield: N/A
• Average Volume (3M): 381.18K
• Price to Earnings (P/E): ―
• Beta (1Y): 1.53
• Revenue Growth: -10.41%
• EPS Growth: 53.85%
• Country: US
• Employees: 1,200
• Sector: Consumer Cyclical
• Sector Strength: 58
• Industry: Furnishings, Fixtures & Appliances
• EPS (TTM): -0.11
• Shares Outstanding: 108,221,500
• 10 Day Avg. Volume: 396,062
• 30 Day Avg. Volume: 381,180
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 0.00
• Price to Cash Flow (P/CF): 0.00
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: 2.64
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: 1.18
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $1.00
• Price Target Upside: 21.95% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 5

Purple Innovation faces significant financial difficulties, including declining revenue, high debt, and negative cash flow, which are major concerns. While technical indicators are mixed, the stock shows some positive momentum. Valuation remains speculative, reflecting financial instability. However, recent strategic initiatives and partnerships offer a potential path to improved performance, providing a complex but somewhat optimistic outlook.

Purple Innovation Business Overview & Revenue Model

Company Description

Purple Innovation, Inc. designs and manufactures mattresses, pillows, and cushions. The company also offers bases, foundations, sheets, mattress protectors, bed frames, seat cushions, weighted blankets, and duvets, as well as pet beds. It markets and sells its products through its e-commerce online channels retail brick-and-mortar wholesale partners, and third-party online retailers, as well as through Purple retail showrooms. The company was founded in 2010 and is headquartered in Lehi, Utah.

How the Company Makes Money

Purple Innovation makes money primarily through the sale of its sleep products, including mattresses, pillows, and bedding accessories. The company employs a direct-to-consumer model, selling its products through its own e-commerce platform, as well as through various retail partners. Key revenue streams include online sales, brick-and-mortar retail partnerships, and licensing agreements for its patented technologies. Additionally, Purple leverages marketing partnerships and collaborations to enhance brand visibility and reach a broader customer base, contributing to its revenue. The company's innovative product offerings and strategic distribution channels are significant factors driving its earnings.

Purple Innovation Financial Statement Overview

Summary

Purple Innovation is experiencing serious financial challenges with declining revenues and negative profit margins. The balance sheet shows high leverage and minimal equity, raising sustainability concerns. Additionally, cash flow problems highlight the company's struggles to generate sufficient operational cash, indicating significant financial risks.

Income Statement

Purple Innovation has seen a decline in revenue over recent years, with the latest TTM revenue showing a significant drop from 2021 and 2022 levels. The gross profit margin for TTM is approximately 37.14%, which is a moderate level in the industry. However, the company is struggling with profitability, as indicated by negative net income and EBIT margins. These negative margins reflect ongoing challenges in cost management and revenue generation. The year-over-year revenue growth rate is negative, highlighting significant business challenges.

Balance Sheet

The company's balance sheet reveals high leverage, with a debt-to-equity ratio of approximately 5.08 in TTM, indicating a concerning level of debt relative to equity. The equity ratio is low at about 6.56%, pointing to a small equity buffer against liabilities. Furthermore, the return on equity is negative due to consistent net losses, suggesting challenges in generating returns for shareholders. The declining stockholders' equity over time underscores these financial pressures.

Cash Flow

Purple Innovation's cash flow statement highlights significant struggles with cash generation. The free cash flow is negative, and the free cash flow growth is also negative, indicating worsening cash generation capabilities. The operating cash flow to net income ratio is negative, reflecting difficulties in converting accounting profits into cash. Despite financing activities providing some cash inflow, the core business operations are not generating sufficient cash, posing a risk to financial stability.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
487.88M	510.54M	575.69M	726.23M	648.47M
	Gross Profit
181.13M	171.82M	210.58M	294.97M	305.10M
	EBIT
-92.18M	-113.71M	122.13M	-19.33M	36.98M
	EBITDA
-45.17M	-94.13M	139.62M	18.94M	-257.85M
	Net Income Common Stockholders
-97.90M	-120.76M	-89.93M	3.11M	10.88M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
29.01M	26.86M	41.75M	91.62M	122.95M
	Total Assets
307.85M	390.63M	433.33M	642.47M	554.73M
	Total Debt
102.73M	152.97M	150.86M	182.32M	93.58M
	Net Debt
73.72M	126.12M	109.10M	90.71M	-29.37M
	Total Liabilities
287.64M	275.02M	254.44M	495.93M	394.48M
	Stockholders Equity
20.20M	115.42M	177.96M	145.77M	159.91M
Cash Flow		Free Cash Flow
-25.09M	-69.90M	-66.93M	-87.96M	42.12M
	Operating Cash Flow
-17.85M	-54.66M	-28.77M	-30.90M	81.26M
	Investing Cash Flow
-7.53M	-16.06M	-34.50M	-57.06M	-39.14M
	Financing Cash Flow
27.53M	55.83M	13.41M	56.62M	47.36M

Purple Innovation Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 0.82
• 50DMA: Positive
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For PRPL, the sentiment is Positive. The current price of 0.82 is above the 20-day moving average (MA) of 0.65, above the 50-day MA of 0.72, and below the 200-day MA of 0.94, indicating a neutral trend. The MACD of >-0.01 indicates Negative momentum. The RSI at 63.38 is Neutral, neither overbought nor oversold. The STOCH value of 67.11 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for PRPL.

Purple Innovation Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
Sector *	61 Neutral	$6.58B	11.81	3.06%	3.99%	2.54%	-21.54%
BSET	56 Neutral	$150.49M	―	-3.83%	4.51%	-11.78%	-13.89%
LIVE	49 Neutral	$41.79M	―	-29.55%	―	15.60%	-883.12%
PRPL	48 Neutral	$80.64M	―	-199.78%	―	-10.41%	53.85%
ISPO	38 Underperform	$40.93M	―	8.84%	―	-14.96%	90.64%
FFAI	33 Underperform	$106.56M	―	-207.37%	―	-31.25%	98.68%

Purple Innovation Corporate Events

Purple Innovation Expands Credit Facility by $20 Million

On May 2, 2025, Purple Innovation entered into a Second Amendment to its credit agreement, increasing its senior secured term loan facility by $20 million, bringing the total to $100 million. This financial move aims to support Purple’s expansion and investments in innovation and advertising. Additionally, Purple announced a significant expansion of its commercial relationship with Somnigroup International, which will see Purple’s presence in Mattress Firm stores grow from 5,000 to 12,000 mattress slots. This expansion is expected to generate approximately $70 million in incremental net revenue starting in 2026. The strategic supply agreement with Tempur Sherwood, a subsidiary of Somnigroup, will allow Sherwood exclusive rights to assemble certain Purple product lines, while Purple retains its GelFlex Grid technology.

Spark’s Take on PRPL Stock

According to Spark, TipRanks’ AI Analyst, PRPL is a Neutral.

Purple Innovation’s overall score of 45 reflects significant financial challenges, with declining revenue and high leverage being key concerns. Technical analysis suggests bearish momentum, while the valuation presents speculative opportunities. The corporate event announcement about exploring strategic options provides a positive outlook, potentially improving the company’s financial situation.

To see Spark’s full report on PRPL stock, click here.

Purple Innovation Accelerates NOL Rights Plan Expiration

On June 27, 2024, Purple Innovation‘s Board of Directors adopted a stockholder rights agreement, the NOL Rights Plan, to protect $238 million in net operating losses from potential tax limitations due to ownership changes. However, on May 6, 2025, the Board decided to accelerate the plan’s expiration to May 7, 2025, to prevent artificial suppression of share price and remove barriers to new investment, following a strategic review initiated in March 2025.

Spark’s Take on PRPL Stock

According to Spark, TipRanks’ AI Analyst, PRPL is a Neutral.

Purple Innovation’s overall score of 45 reflects significant financial challenges, with declining revenue and high leverage being key concerns. Technical analysis suggests bearish momentum, while the valuation presents speculative opportunities. The corporate event announcement about exploring strategic options provides a positive outlook, potentially improving the company’s financial situation.

To see Spark’s full report on PRPL stock, click here.

Purple Innovation Explores Strategic Options Amid Financial Turnaround

On March 13, 2025, Purple Innovation announced a strategic review following expressions of interest, forming a special committee to explore options like a sale or merger. The company reported a return to positive adjusted EBITDA and cash flow in Q4 2024, despite a revenue decline, due to cost-saving initiatives and operational improvements. This financial turnaround supports their ‘Path to Premium’ strategy, with plans for continued investment in innovation and advertising.