Sleep Number (SNBR) AI Stock Analysis

• Market Cap: $75.68M
• Dividend Yield: N/A
• Average Volume (3M): 702.55K
• Price to Earnings (P/E): 0.7
• Beta (1Y): 3.28
• Revenue Growth: -16.95%
• EPS Growth: -88.00%
• Country: US
• Employees: 3,600
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Furnishings, Fixtures & Appliances
• EPS (TTM): -2.55
• Shares Outstanding: 22,864,000
• 10 Day Avg. Volume: 1,142,307
• 30 Day Avg. Volume: 702,550
• PEG Ratio: >-0.01
• Price to Book (P/B): -0.34
• Price to Sales (P/S): 0.14
• P/FCF Ratio: -11.12
• Enterprise Value/Market Cap: 5.56
• Enterprise Value/Revenue: 0.30
• Enterprise Value/Gross Profit: 0.51
• Enterprise Value/Ebitda: 7.35
• 1Y Price Target: $4.50
• Price Target Upside: 35.95% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 2
• EPS Forecast (FY): -0.47
• Revenue Forecast (FY): $1.37B

• Rating: 41 Neutral
• Price Target: $3.50 ▲(5.74% Upside)
• Action: Reiterated Date: 03/13/26
• Date: Action: Reiterated 03/13/26

The score is held down primarily by very weak financial performance (losses, inconsistent/negative cash generation, and a stressed balance sheet with negative equity) and strong bearish technicals (price well below moving averages with negative momentum). A moderately constructive earnings-call outlook (cost cuts, EBITDA improvement, and a target for positive free cash flow) provides some offset, but valuation is not supportive given losses and no indicated yield.

Positive Factors

High product gross margins

Sleep Number’s product mix retains structurally high gross margins (~57%–60%), and ComfortMode shows an incremental ~10 percentage point margin benefit. Durable mattress-level margins give the company room to invest in marketing and absorb markdowns while still restoring operating profitability over several quarters.

Rapid product reset and simplified lineup

A faster-than-typical product reset and SKU simplification reduce complexity, inventory carrying risk, and go-to-market time. Those structural changes improve assortment clarity, lower SG&A and fulfillment costs per unit, and support steadier sales and margin recovery over a multi-quarter horizon.

Material fixed-cost reductions

Large executed cost actions ($185M) plus $50M more materially reduce the fixed-cost base, improving operating leverage. Permanently lower structural costs can turn modest revenue growth into outsized EBITDA gains and reduce cash burn, supporting a sustainable path to positive free cash flow.

Negative Factors

Stressed capital structure

Negative equity and very high debt relative to assets indicate a stressed capital structure that limits flexibility. Persistent negative equity raises refinancing and covenant risk, constraining investment, marketing cadence and the ability to withstand prolonged demand weakness without dilutive or costly capital fixes.

Inconsistent and negative cash generation

Reversion to negative operating and free cash flow in the trailing twelve months undermines the company’s ability to self-fund operations and service debt. Inconsistent cash generation raises reliance on external financing and makes multi-quarter turnaround execution and inventory resets more precarious.

Sustained top-line pressure

Material revenue declines and unit deleverage reduce the benefit of high gross margins and hamper operating leverage recovery. Persistent demand weakness forces markdowns, slows inventory turn, and lengthens the timeline to restore profitability and normalize cash flow even after cost cuts are realized.

Sleep Number Business Overview & Revenue Model

Company Description

Sleep Number Corporation, together with its subsidiaries, offers sleep solutions and services in the United States. The company designs, manufactures, markets, retails, and services beds, pillows, sheets, and other bedding products under the Sleep Number name. It also provides adjustable bases under the FlextFit, and smart beds under the Sleep Number 360 brands. The company sells its products directly to consumers through retail, online, phone, and chat as well as through its e-commerce activities. As of January 2, 2022, it operated approximately 648 retail stores in 50 states. The company was formerly known as Select Comfort Corporation and changed its name to Sleep Number Corporation in November 2017. Sleep Number Corporation was founded in 1987 and is headquartered in Minneapolis, Minnesota.

How the Company Makes Money

Sleep Number primarily makes money by selling products directly to consumers (DTC). Its core revenue stream is the sale of Sleep Number smart beds (mattress systems), which typically represent the largest portion of product sales. Additional revenue is generated from complementary products sold alongside beds, including adjustable bases/furniture components, pillows, sheets and other bedding, and accessories. The company sells through its owned store network and e-commerce/phone channels, capturing retail margin rather than wholesaling broadly to third-party retailers. Sleep Number also generates revenue from services and other related items such as delivery and setup/installation fees where applicable, and from extended service plans/warranties if offered to customers. Financing programs offered to consumers (often facilitated through third-party credit providers) can support conversion and ticket size; if any income is earned from these arrangements beyond product sales (e.g., program-related fees), specific details are null. Significant factors influencing earnings include unit volume and average selling price of smart beds, attachment rates of accessories and bases, promotional cadence/discounting, and the costs of operating company-owned retail and fulfillment/manufacturing operations.

Sleep Number Financial Statement Overview

Summary

Financial fundamentals are highly strained: profitability has shifted from 2020–2021 gains to sustained losses (TTM net margin about -5.4%), cash flow has reverted to negative in TTM after only a modest 2024 rebound, and the balance sheet is stressed with persistent negative equity and very high debt relative to assets—limiting flexibility and increasing financial risk.

Income Statement

Profitability has deteriorated materially. After solid earnings in 2020–2021 (net margins ~7%), results flipped to losses from 2022 through 2024 (net margin -1.2% in 2024) and worsened in TTM (Trailing-Twelve-Months) with negative EBIT and a net margin of about -5.4%. Gross margin has held relatively steady near ~57%–60%, but operating leverage has weakened. Revenue trends are also unfavorable: modest declines in 2022–2024 followed by an extreme revenue contraction shown in TTM (Trailing-Twelve-Months), signaling significant demand disruption and/or reporting volatility.

Balance Sheet

The balance sheet is the key pressure point: stockholders’ equity is negative across all periods (and more negative in TTM versus 2024), which reduces financial flexibility and elevates risk. Total debt remains very large relative to the asset base (e.g., debt of ~$936M vs. assets of ~$861M in 2024), and the negative equity makes leverage ratios difficult to interpret but directionally underscores high leverage. Overall, the capital structure looks stressed and leaves limited cushion if operating performance remains weak.

Cash Flow

Cash generation has become inconsistent. Operating cash flow was strong in 2020–2021 but turned negative in 2023 and again in TTM (Trailing-Twelve-Months), while free cash flow was negative in most recent periods (notably 2022, 2023, and deeply negative in TTM). 2024 showed a modest rebound to positive free cash flow, but the reversion to negative operating and free cash flow in TTM suggests the improvement did not hold. This weakens the company’s ability to self-fund operations and service debt without external support.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	1.41B	1.68B	1.89B	2.11B	2.18B
Gross Profit	832.95M	1.00B	1.09B	1.20B	1.32B
EBITDA	57.30M	89.22M	95.34M	135.28M	253.93M
Net Income	-131.96M	-20.33M	-15.29M	36.61M	153.75M
Balance Sheet
Total Assets	680.06M	860.81M	950.88M	953.94M	919.54M
Cash, Cash Equivalents and Short-Term Investments	1.69M	1.95M	2.54M	1.79M	2.39M
Total Debt	354.30M	936.11M	972.65M	896.01M	791.05M
Total Liabilities	1.26B	1.31B	1.39B	1.39B	1.34B
Stockholders Equity	-578.48M	-451.59M	-441.93M	-438.18M	-424.95M
Cash Flow
Free Cash Flow	-17.69M	3.64M	-66.08M	-33.32M	233.11M
Operating Cash Flow	-3.28M	27.14M	-9.03M	36.14M	300.01M
Investing Cash Flow	-17.69M	-26.29M	-58.35M	-70.61M	-66.64M
Financing Cash Flow	20.71M	-1.44M	68.13M	33.87M	-235.22M

Sleep Number Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 3.31
• 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 3.31 is below the 20-day moving average (MA) of 5.99, below the 50-day MA of 8.52, and below the 200-day MA of 7.86, indicating a bearish trend. The MACD of -1.56 indicates Positive momentum. The RSI at 20.64 is Positive, neither overbought nor oversold. The STOCH value of 10.35 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
ETD	70 Outperform	$568.47M	12.45	9.20%	7.86%	-4.26%	―
LZB	65 Neutral	$1.35B	18.08	8.12%	2.39%	1.78%	-25.36%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
MLKN	59 Neutral	$1.23B	11.21	-1.98%	4.16%	4.34%	-141.36%
LEG	57 Neutral	$1.39B	6.47	26.15%	1.84%	-6.03%	―
PRPL	48 Neutral	$75.68M	-2.12	-9999.00%	―	-9.47%	48.11%
SNBR	41 Neutral	$75.68M	0.67	16.35%	―	-16.95%	-88.00%

Sleep Number Corporate Events

Sleep Number details turnaround progress and transformation plans

On March 12, 2026, Sleep Number posted a detailed investor presentation outlining the progress of its ongoing turnaround and financial and operational transformation. The company highlighted 2025 net sales of $1.41 billion in line with guidance, adjusted EBITDA of $78 million above outlook, more than $185 million in annualized cost reductions with another $50 million being executed, and a reshaped leadership team focused on restoring profitable growth.

Management said 2025 was a pivotal year, citing the successful launch of its ComfortMode mattress, which exceeded sales expectations by 3.5 times, and the planned March 23 reset of its entire product line to emphasize comfort, durability, adjustability and value at more approachable premium price points. Sleep Number is also rebuilding its marketing engine, pursuing new physical and digital distribution, and working to address liquidity and capital structure, including retaining Guggenheim Securities to evaluate options to improve its balance sheet and financial flexibility as it targets topline growth in the second half of the year and a return to free cash flow generation in 2026.

The most recent analyst rating on (SNBR) stock is a Hold with a $4.50 price target. To see the full list of analyst forecasts on Sleep Number stock, see the SNBR Stock Forecast page.

Sleep Number Names Kelly Baker Principal Accounting Officer

On March 10, 2026, Sleep Number’s board appointed Kelly F. Baker as the company’s Controller and Principal Accounting Officer, effective March 11, 2026, formalizing a role she had held on an interim basis since July 21, 2025. The move solidifies the company’s finance leadership structure, drawing on Baker’s public accounting background and finance roles at Miromatrix Medical, Donaldson Company, The Tile Shop, and Virtual Radiologic, and comes with no special arrangements or related-party transactions disclosed in connection with her selection.

The most recent analyst rating on (SNBR) stock is a Hold with a $12.00 price target. To see the full list of analyst forecasts on Sleep Number stock, see the SNBR Stock Forecast page.

Sleep Number launches strategic partnership with Travis Kelce

On January 28, 2026, Sleep Number announced a three-year strategic partnership and investment deal with three-time Super Bowl champion Travis Kelce, who has used the company’s products since 2019. Under the agreement, Kelce and his company TMK Enterprises LLC will collaborate on national advertising and digital content to promote the performance and wellness benefits of Sleep Number beds, while Kelce receives cash and restricted stock units that vest over three years and commits to buying additional shares on the open market, making him one of the company’s largest shareholders with under 5% ownership. The deal deepens Sleep Number’s long-standing relationship with the NFL—where 83% of players have Sleep Number beds—and is a key element of the company’s broader effort to overhaul its marketing strategy, sharpen brand visibility and attract younger consumers by leveraging Kelce’s high profile and alignment with sleep-focused performance.

The most recent analyst rating on (SNBR) stock is a Hold with a $10.50 price target. To see the full list of analyst forecasts on Sleep Number stock, see the SNBR Stock Forecast page.