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Purple Innovation (PRPL)
NASDAQ:PRPL
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Purple Innovation
(NASDAQ:PRPL)
38Underperform
Purple Innovation (PRPL) vs. S&P 500 (SPY)
Market Cap
$63.55M
Dividend YieldN/A
Average Volume (3M)1.06M
Price to Earnings (P/E)―
Beta (1Y)1.47
Revenue Growth-5.48%
EPS Growth17.33%
CountryUS
Employees1,200
SectorConsumer Cyclical
Sector Strength58
IndustryFurnishings, Fixtures & Appliances
Share Statistics
EPS (TTM)-0.92
Shares Outstanding107,545,494
10 Day Avg. Volume376,880
30 Day Avg. Volume1,059,999
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.19
Price to Cash Flow (P/CF)3.50
P/FCF Ratio4.20
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$1.00Price Target Upside51.52% Upside
Rating ConsensusHold
Number of Analyst Covering5
Purple Innovation Business Overview & Revenue Model
Company DescriptionPurple 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 MoneyPurple 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.40
Negative
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.30
Negative
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.35
Negative
| 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
Neutral
0.66
Price Trends
0.78
Negative
0.88
Negative
0.97
Negative
Market Momentum
-0.05
Negative
49.51
Neutral
42.14
Neutral
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 0.66 is below the 20-day moving average (MA) of 0.67, below the 50-day MA of 0.78, and below the 200-day MA of 0.97, indicating a neutral trend. The MACD of -0.05 indicates Negative momentum. The RSI at 49.51 is Neutral, neither overbought nor oversold. The STOCH value of 42.14 is Neutral, 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
Overall Rating
UnderperformOutperform
Sector (60)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
60 Neutral | $6.55B | 11.40 | 3.24% | 4.25% | 2.38% | -21.28% | |
56 Neutral | $153.89M | ― | -3.83% | 4.41% | -11.78% | -13.89% | |
50 Neutral | $33.55M | ― | -29.55% | ― | 15.60% | -883.12% | |
38 Underperform | $63.55M | ― | -144.37% | ― | -5.48% | 17.33% | |
36 Underperform | $44.41M | ― | 8.84% | ― | -14.96% | 90.64% | |
31 Underperform | $83.01M | ― | -207.37% | ― | -31.25% | 98.68% |
* Consumer Cyclical Sector Average
Performance Comparison
PRPL
Purple Innovation
0.66
-0.84
-56.00%
BSET
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17.87
5.13
40.27%
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Live Ventures
10.40
-15.54
-59.91%
INTG
The Intergroup
13.78
-7.58
-35.49%
FFAI
Faraday Future Intelligent Electric
1.14
-0.82
-41.84%
ISPO
Inspirato
3.59
-0.31
-7.95%
Purple Innovation Earnings Call Summary
Earnings Call Date: Mar 13, 2025 | % Change Since: 0.00% | Next Earnings Date: May 13, 2025
Earnings Call Sentiment Neutral
The earnings call highlighted significant operational improvements and cost efficiencies, which have positively impacted gross margins and are expected to lead to EBITDA savings in the future. However, the company faced challenges with a decline in revenue and negative adjusted EBITDA, driven by macroeconomic pressures and strategic reductions in advertising and wholesale relationships. While there is optimism for future profitability, the current environment remains challenging.Highlights
Improved Gross Margin
Adjusted gross margin improved by 340 basis points year-over-year to 40.5%, exceeding the 40% year-end target for the second consecutive period.
Operational Efficiencies and Restructuring
The company achieved significant operational efficiencies with a corporate restructuring and consolidation of manufacturing facilities, expected to yield annual EBITDA savings of $15 to $20 million starting in 2025.
Positive Cash Flow and Adjusted EBITDA Forecast
The company plans to have positive cash flow and adjusted EBITDA in 2025, supported by a leaner corporate structure and rightsized manufacturing operations.
Successful Product Strategy
Showrooms were flat year-over-year, driven by an increase in average selling prices as the company continues to upsell customers to higher-priced models through its Path to Premium sleep strategy.
Inventory and Efficiency Improvements
Net inventories were reduced by 16.9% year over year, and mattress production became more efficient with a 25% decrease in hours per mattress produced compared to last year.
Lowlights
Revenue Decline
Q3 sales were down 15% year-over-year, driven by softness in consumer demand and a reduction in advertising spend.
Wholesale Channel Challenges
Wholesale net revenue was down 20.1% year-over-year due to exiting relationships with certain customers and a decrease in door count by 200 doors.
Negative Adjusted EBITDA
Adjusted EBITDA for the third quarter was negative $6.4 million, although it was an improvement from the previous year's negative $16.3 million.
Macroeconomic Pressures
The company expects continued pressure on the top line due to industry-wide demand declines and plans to finish the year at the lower end of its guidance for revenue and adjusted EBITDA.
Company Guidance
During the Purple Innovation Q3 2024 earnings call, the company provided guidance indicating that it anticipates finishing the year at the lower end of its revenue guidance range of $490 million to $510 million and adjusted EBITDA guidance of negative $20 million to negative $10 million. The company outlined several strategic initiatives aimed at improving profitability, including driving gross margin improvements, which saw a 340 basis point increase year-over-year to 40.5%. This improvement is supported by cost savings through supplier diversification, plant efficiency gains, and optimized freight scheduling. The restructuring and consolidation of manufacturing operations are expected to yield annual EBITDA savings of $15 million to $20 million starting in 2025. Additionally, the company aims to achieve positive cash flow and adjusted EBITDA next year, driven by its leaner corporate structure and rightsized manufacturing operations. Despite a 15% year-over-year decline in Q3 sales, Purple Innovation remains focused on its Path to Premium sleep strategy and expects continued pressure on the top line due to industry-wide demand declines.Purple Innovation Corporate Events
M&A TransactionsBusiness Operations and StrategyFinancial Disclosures
Purple Innovation Explores Strategic Options Amid Financial Turnaround
Positive
Mar 13, 2025
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.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
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.