Sleep Number (SNBR) AI Stock Analysis

• Market Cap: $125.24M
• Dividend Yield: N/A
• Average Volume (3M): 486.45K
• Price to Earnings (P/E): ―
• Beta (1Y): 2.71
• Revenue Growth: -14.40%
• EPS Growth: -2.14%
• Country: US
• Employees: 3,600
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Furnishings, Fixtures & Appliances
• EPS (TTM): -1.09
• Shares Outstanding: 22,771,000
• 10 Day Avg. Volume: 598,299
• 30 Day Avg. Volume: 486,453
• PEG Ratio: -0.52
• Price to Book (P/B): -0.76
• Price to Sales (P/S): 0.20
• P/FCF Ratio: 94.43
• Enterprise Value/Market Cap: 8.67
• Enterprise Value/Revenue: 0.71
• Enterprise Value/Gross Profit: 1.18
• Enterprise Value/Ebitda: 14.63
• 1Y Price Target: $7.00
• Price Target Upside: 9.89% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 2

• Rating: 39 Underperform
• Price Target: $5.00 ▼(-21.51% Downside)

Sleep Number's overall stock score is primarily impacted by its weak financial performance, characterized by declining revenues, negative profitability, and high leverage. Technical analysis also indicates bearish momentum, with the stock trading below key moving averages and in oversold territory. Valuation metrics are unfavorable due to negative earnings. The earnings call provides some optimism with strategic initiatives, but significant challenges remain.

Sleep Number Business Overview & Revenue Model

Company Description

Sleep Number Corporation (SNBR) is a leading American mattress and bedding company that specializes in innovative sleep solutions. The company operates in the home furnishings sector, primarily focusing on the design, manufacture, and retail of adjustable air mattresses and related products. Sleep Number's core offerings include its proprietary Sleep Number beds, which allow customers to customize firmness and support through air chambers controlled via a smartphone app or remote. Additionally, the company provides bedding accessories, sleep management tools, and technology-driven sleep solutions aimed at enhancing overall sleep quality.

How the Company Makes Money

Sleep Number generates revenue through multiple key streams, primarily from the sale of its adjustable air mattresses and smart beds, which are marketed directly to consumers through its retail stores and online platforms. The company also earns income from the sale of sleep accessories, including pillows, sheets, and mattress protectors. A significant part of its revenue comes from the direct-to-consumer approach, which allows for higher margins compared to traditional retail models. Furthermore, Sleep Number has developed partnerships with various health and wellness organizations, leveraging data analytics to enhance its product offerings and customer experience. These initiatives, coupled with ongoing investments in technology and innovation, contribute to its overall earnings and customer retention strategies.

Sleep Number Financial Statement Overview

Summary

Sleep Number is facing significant financial challenges, including declining revenues, negative profitability, high leverage, and liquidity issues. The company's financial health is under pressure, with negative equity and insufficient cash flow generation to support operations and investments. Strategic restructuring may be needed to improve financial stability.

Income Statement

Sleep Number's current TTM revenue has decreased compared to the previous annual report, indicating a declining growth trajectory. Gross Profit Margin is healthy at approximately 60.3%, but the company is currently operating at a net loss, with a negative Net Profit Margin of -2.7%. EBIT and EBITDA margins are also quite low, reflecting challenges in profitability and operational efficiency.

Balance Sheet

The company has a negative stockholder's equity, indicating financial instability. The Debt-to-Equity ratio is not calculable due to negative equity, but the high total debt levels relative to assets signal significant leverage. Return on Equity (ROE) is not meaningful due to negative equity, and the Equity Ratio is negative, underscoring financial risk.

Cash Flow

Operating cash flow is positive, but the Free Cash Flow is negative, indicating insufficient cash generation to cover capital expenditures. The Operating Cash Flow to Net Income ratio is negative due to negative net income, highlighting profitability challenges. Additionally, Free Cash Flow to Net Income is not favorable, stressing liquidity issues.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2019	Dec 2018
Income Statement
Total Revenue	1.52B	1.68B	1.89B	2.11B	1.70B	1.53B
Gross Profit	919.39M	1.00B	1.09B	1.20B	1.05B	927.96M
EBITDA	74.25M	89.22M	95.34M	135.28M	173.96M	154.39M
Net Income	-41.46M	-20.33M	-15.29M	36.61M	81.84M	69.54M
Balance Sheet
Total Assets	804.51M	860.81M	950.88M	953.94M	806.04M	470.14M
Cash, Cash Equivalents and Short-Term Investments	1.35M	1.95M	2.54M	1.79M	1.59M	1.61M
Total Debt	933.69M	936.11M	972.65M	896.01M	588.65M	199.60M
Total Liabilities	1.29B	1.31B	1.39B	1.39B	965.47M	579.69M
Stockholders Equity	-480.69M	-451.59M	-441.93M	-438.18M	-159.43M	-109.55M
Cash Flow
Free Cash Flow	-12.66M	3.64M	-66.08M	-33.32M	129.92M	86.03M
Operating Cash Flow	4.82M	27.14M	-9.03M	36.14M	189.16M	131.54M
Investing Cash Flow	-20.61M	-26.29M	-58.35M	-70.61M	-56.62M	-45.24M
Financing Cash Flow	15.11M	-1.44M	68.13M	33.87M	-132.56M	-88.34M

Sleep Number Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 6.37
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Positive
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SNBR, the sentiment is Negative. The current price of 6.37 is above the 20-day moving average (MA) of 6.26, below the 50-day MA of 7.86, and below the 200-day MA of 9.23, indicating a bearish trend. The MACD of -0.54 indicates Positive momentum. The RSI at 28.76 is Positive, neither overbought nor oversold. The STOCH value of 12.08 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for SNBR.

Sleep Number Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
LEG	―	$1.26B	5.80	26.19%	2.14%	-6.05%	―
ETD	―	$623.69M	14.73	9.96%	7.06%	-4.61%	―
LZB	―	$1.31B	14.52	9.09%	2.78%	2.18%	-22.35%
Sector *	―	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
MLKN	―	$1.07B	―	-1.18%	4.39%	5.37%	-127.27%
PRPL	―	$85.84M	-1.01	-331.75%	―	-13.19%	20.95%
SNBR	―	$125.24M	-3.03	―	―	-14.40%	-2.14%

Sleep Number Corporate Events

Sleep Number Reports Q2 2025 Financial Results

Sleep Number Corporation, a leader in sleep wellness, specializes in innovative sleep solutions through its smart bed ecosystem, offering personalized sleep and health insights to enhance overall well-being. In its second quarter of 2025, Sleep Number reported a net sales decline of 19.7% to $328 million compared to the same period last year, alongside a net loss of $25 million. Despite these challenges, the company maintained a stable gross profit margin of 59.1% and reduced operating expenses by 21%, reflecting strategic cost management efforts.

Sleep Number Corp’s Earnings Call: Balancing Cost Cuts and Debt Challenges

The recent earnings call for Sleep Number Corp painted a mixed picture of the company’s financial health and strategic direction. While the call highlighted significant achievements in cost reductions and marketing efficiency improvements, these were offset by challenges such as declining net sales and the need to address the company’s capital structure and debt leverage. The sentiment expressed during the call was cautiously optimistic, with a focus on strategic changes to reset the business amidst current financial performance and debt concerns.