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Purple Innovation
(NASDAQ:PRPL)
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Rating:44Neutral
Price Target:
$2.50
▼(-47.03% Downside)
Action:Reiterated
Date:09/22/26
The score is held down primarily by weak financial health (negative equity, ongoing losses, and negative free cash flow) and bearish technical trends (below major moving averages with negative MACD). Offsetting factors include improving profitability/cash metrics discussed on the earnings call and an oversold setup, but valuation support is limited given the negative P/E and no dividend yield provided.
Positive Factors
Margin and EBITDA improvement
Improved gross margin and a positive adjusted EBITDA result show progress in converting sales into operating earnings. Sourcing, pricing, and lower expenses may support further improvement over the next several months, although the reported margin benefit includes a presentation reclassification.
Negative Factors
Negative equity and sizable debt
Negative equity reflects accumulated losses and materially limits financial flexibility, while sizable debt increases sensitivity to further operating weakness. This capital structure can constrain investment and make it harder for Purple to absorb demand pressure or sustain operations without improved earnings and cash generation.
Read all positive and negative factors
Positive Factors
Negative Factors
Margin and EBITDA improvement
Improved gross margin and a positive adjusted EBITDA result show progress in converting sales into operating earnings. Sourcing, pricing, and lower expenses may support further improvement over the next several months, although the reported margin benefit includes a presentation reclassification.
Read all positive factors
Purple Innovation Key Performance Indicators (KPIs)
Any
Revenue by Channel
Shows how the company’s sales split across channels such as direct-to-consumer, wholesale/retail partners and third-party marketplaces. For Purple Innovation, channel mix drives margins, customer acquisition cost and control over brand experience—direct sales tend to deliver higher margins and better customer data, while heavy wholesale exposure can boost volume but compress pricing and leave the company vulnerable to retailer inventory and promotional cycles.
Shows how the company’s sales split across channels such as direct-to-consumer, wholesale/retail partners and third-party marketplaces. For Purple Innovation, channel mix drives margins, customer acquisition cost and control over brand experience—direct sales tend to deliver higher margins and better customer data, while heavy wholesale exposure can boost volume but compress pricing and leave the company vulnerable to retailer inventory and promotional cycles.
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The Fly
The FlyPurple Innovation (PRPL) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$10.51M
Dividend Yield0.03%
Average Volume (3M)45.07K
Price to Earnings (P/E)―
Beta (1Y)1.11
Revenue Growth-0.74%
EPS Growth42.52%
CountryUS
Employees1,100
SectorConsumer Cyclical
Sector Strength84
IndustryFurnishings, Fixtures & Appliances
Share Statistics
EPS (TTM)-11.24
Shares Outstanding4,353,109
10 Day Avg. Volume19,703
30 Day Avg. Volume45,068
Financial Highlights & Ratios
PEG Ratio0.03
Price to Book (P/B)-2.51
Price to Sales (P/S)0.16
P/FCF Ratio-1.78
Enterprise Value/Market Cap21.96
Enterprise Value/Revenue0.51
Enterprise Value/Gross Profit1.22
Enterprise Value/Ebitda32.77
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusHold
Number of Analyst Covering1
EPS Forecast (FY)-6.36
Revenue Forecast (FY)$446.44M
Purple Innovation Business Overview & Revenue Model
Company Description
Purple Innovation, Inc. designs, manufactures, and sells sleep and other products in the United States and internationally. It offers mattresses, pillows, sheets, foundations, waterproof mattress protectors, bases, and seat cushions, as well as bl...
How the Company Makes Money
Purple makes money by selling branded sleep products—primarily mattresses—through multiple distribution channels, generating revenue when products are shipped/delivered to customers or retail partners (consistent with typical product sales revenue...
Purple Innovation Earnings Call Summary
Earnings Call Date:Aug 10, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Nov 10, 2026
Earnings Call Sentiment Positive
The call presented a mix of robust operational and profitability improvements alongside ongoing top-line pressure from a soft wholesale environment. Positive highlights include strong showroom performance (16.6% YoY growth and +18% comps), sequential e-commerce recovery, premium product momentum, a tariff refund and sourcing benefits, reduced operating expenses, an adjusted EBITDA turnaround to $2.1M, and positive operating cash flow and inventory reductions. Key challenges include a 6.5% decline in total revenue, a reported 19.1% drop in wholesale revenue (partly driven by ~$5.3M of customer payments), cost pressures (freight/materials/mineral oil volatility), mixed initial consumer reaction to price increases, and a downward revision to FY26 revenue guidance to $420M–$440M. On balance, the company demonstrated meaningful progress in profitability, cash generation, and strategic execution despite persistent demand headwinds, and management maintained positive adjusted EBITDA guidance for the year.Positive Updates
Showroom Strength and DTC Growth
Showroom retail sales increased 16.6% year-over-year to $18.4M, with comparable store sales (+stores open >=1 year) up ~18% and marking the fourth consecutive quarter of positive comps. Overall direct-to-consumer (DTC) net revenue grew 3.4% to $60.9M vs. $58.9M.
Negative Updates
Revenue Decline
Total net revenue fell 6.5% year-over-year to $98.3M from $105.1M, driven primarily by softness in the wholesale channel and other reductions.
Read all updates
Q2-2026 Updates
Positive
Negative
Showroom Strength and DTC Growth
Showroom retail sales increased 16.6% year-over-year to $18.4M, with comparable store sales (+stores open >=1 year) up ~18% and marking the fourth consecutive quarter of positive comps. Overall direct-to-consumer (DTC) net revenue grew 3.4% to $60.9M vs. $58.9M.
Read all positive updates
Company Guidance
Management lowered fiscal 2026 net revenue guidance to $420–$440 million while reiterating confidence in profitability, targeting fiscal‑year adjusted EBITDA of $20–$25 million and revising the gross‑margin target to approximately 45% (up from ~40% due to a reclassification; Q2 GAAP gross margin was 45.2%). They said mid‑June price increases of roughly 8–10% across mattresses and pillows, plus ongoing sourcing and productivity initiatives, should drive further margin improvement in H2; they expect a possible small step back in operating cash flow in Q3 followed by a large Q4 increase that keeps the company cash‑positive for the year (Q2 cash was $23.3M, six‑month operating cash flow $3.6M, YTD capex $3.6M, and net inventory $55.4M). Management also plans to open five additional showrooms before year‑end (and 12–16 in fiscal 2027) and cited wholesale softness as the primary driver of the lower revenue guide (wholesale was down 19.1% in Q2, though excluding $5.3M of payments to customers would imply about an 8% decline).Purple Innovation Financial Statement Overview
Summary
Income Statement
28
Negative
Balance Sheet
18
Very Negative
Cash Flow
24
Negative
| Breakdown | TTM | Mar 2026 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 453.45M | 468.73M | 487.88M | 510.54M | 573.20M | 726.23M |
| Gross Profit | 189.44M | 188.56M | 181.13M | 171.82M | 208.09M | 294.97M |
| EBITDA | 7.04M | 1.53M | -45.17M | -94.13M | 141.47M | 14.00M |
| Net Income | -48.70M | -51.41M | -97.90M | -120.76M | -92.47M | 4.03M |
Balance Sheet | ||||||
| Total Assets | 264.50M | 296.26M | 307.85M | 390.63M | 433.33M | 642.47M |
| Cash, Cash Equivalents and Short-Term Investments | 23.30M | 24.34M | 29.01M | 26.86M | 40.05M | 91.62M |
| Total Debt | 215.18M | 204.29M | 158.13M | 152.97M | 152.96M | 184.62M |
| Total Liabilities | 328.30M | 325.93M | 287.64M | 275.02M | 258.16M | 495.93M |
| Stockholders Equity | -63.77M | -29.69M | 20.20M | 115.42M | 174.26M | 145.77M |
Cash Flow | ||||||
| Free Cash Flow | -9.71M | -41.91M | -25.09M | -69.90M | -66.93M | -87.96M |
| Operating Cash Flow | -3.13M | -33.83M | -17.85M | -54.66M | -28.77M | -30.90M |
| Investing Cash Flow | -7.47M | -8.28M | -7.53M | -16.06M | -34.50M | -57.06M |
| Financing Cash Flow | -346.00K | 37.44M | 27.53M | 55.83M | 13.41M | 56.62M |
Purple Innovation Technical Analysis
Neutral
4.72
Price Trends
3.35
Negative
6.11
Negative
10.91
Negative
Market Momentum
-0.29
Negative
48.01
Neutral
88.15
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For PRPL, the sentiment is Neutral. The current price of 4.72 is above the 20-day moving average (MA) of 2.18, above the 50-day MA of 3.35, and below the 200-day MA of 10.91, indicating a neutral trend. The MACD of -0.29 indicates Negative momentum. The RSI at 48.01 is Neutral, neither overbought nor oversold. The STOCH value of 88.15 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for PRPL.
Purple Innovation Risk Analysis
Purple Innovation disclosed 41 risk factors in its most recent earnings report. Purple Innovation reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Purple Innovation Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
68 Neutral | $498.54M | 12.60 | 8.40% | 24.32% | -5.72% | -22.50% | |
61 Neutral | $18.38B | 12.79 | -2.54% | 3.03% | 1.52% | -15.83% | |
61 Neutral | $211.88M | 11.82 | 8.69% | ― | 1.07% | 52.13% | |
60 Neutral | $1.46B | 14.34 | 7.34% | 3.71% | 1.20% | ― | |
56 Neutral | $1.17B | 14.39 | 7.86% | 3.38% | 0.20% | -10.08% | |
44 Neutral | $10.51M | -0.21 | 107.92% | 0.03% | -0.74% | 42.52% |
* Consumer Cyclical Sector Average
PRPL
Purple Innovation
2.53
-18.95
-88.22%
ETD
Ethan Allen
20.79
-1.56
-7.00%
MLKN
MillerKnoll
21.68
4.92
29.36%
LZB
La-Z-Boy Incorporated
30.40
-1.46
-4.58%
LOVE
The Lovesac Company
15.34
0.39
2.61%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.