Sleep Number (SNBR)
NASDAQ:SNBR
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Sleep Number
(NASDAQ:SNBR)
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Rating:38Underperform
Price Target:
$0.17
▼(-93.48% Downside)
Action:Reiterated
Date:06/18/26
The score is driven primarily by severely deteriorated financial performance (losses, negative cash flow, and negative equity) and highly negative corporate events (Chapter 11 and impending Nasdaq delisting). Technicals also reflect extreme weakness with the stock well below all major moving averages. Earnings-call operational improvements are a secondary positive but are outweighed by liquidity and capital-structure stress, while valuation is not supportive due to losses and no dividend.
Positive Factors
Relatively strong gross margins
Sustained gross margins around the high-50s provide a durable earnings cushion tied to Sleep Number’s product economics. This margin base supports recovery potential and protects gross profitability as the company works to right-size operating expenses and shift mix toward higher‑priced beds.
Negative Factors
Chapter 11 and sale process
Chapter 11 and a court‑supervised sale materially reshape capital structure and ownership—creditors and bidders take priority and common equity faces severe impairment. This is a structural corporate change that can permanently alter strategy, supplier terms and shareholder value.
Read all positive and negative factors
Positive Factors
Negative Factors
Relatively strong gross margins
Sustained gross margins around the high-50s provide a durable earnings cushion tied to Sleep Number’s product economics. This margin base supports recovery potential and protects gross profitability as the company works to right-size operating expenses and shift mix toward higher‑priced beds.
Read all positive factors
Sleep Number (SNBR) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$5.17M
Dividend YieldN/A
Average Volume (3M)702.55K
Price to Earnings (P/E)―
Beta (1Y)4.09
Revenue Growth-16.69%
EPS Growth-698.31%
CountryUS
Employees3,600
SectorConsumer Cyclical
Sector Strength84
IndustryFurnishings, Fixtures & Appliances
Share Statistics
EPS (TTM)-7.57
Shares Outstanding23,049,000
10 Day Avg. Volume1,142,307
30 Day Avg. Volume702,550
Financial Highlights & Ratios
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 Cap185.99
Enterprise Value/Revenue0.72
Enterprise Value/Gross Profit1.24
Enterprise Value/Ebitda-29.89
Forecast
1Y Price Target
$2.50Price Target Upside-1.19% Downside
Rating ConsensusHold
Number of Analyst Covering2
EPS Forecast (FY)-1.65
Revenue Forecast (FY)$1.36B
Sleep Number Business Overview & Revenue Model
Company Description
Sleep Number Corporation, along with its subsidiaries, provides a range of sleep-related products and support services throughout the United States. The company oversees the entire lifecycle of its primary bedding offerings—including beds, pillows...
How the Company Makes Money
Sleep Number primarily makes money by selling products directly to consumers, with revenue largely driven by smart bed systems (its core Sleep Number branded beds) and associated components. A meaningful portion of sales also comes from complement...
Sleep Number Earnings Call Summary
Earnings Call Date:May 12, 2026
(Q1-2026)
| % Change Since: |
Next Earnings Date:Jul 23, 2026
Earnings Call Sentiment Neutral
The call presented a mix of encouraging operational progress and meaningful near-term financial stress. Highlights include a successful and fast product reset with strong early consumer metrics (NPS gains, ARU improvement, lower returns), improving March and April demand trends, e-commerce growth, sizeable cost-savings execution, and short-term lender support that provided $55 million of incremental liquidity. Offsetting these positives are significant YoY revenue decline (-19%), margin compression (~329 bps YoY), negative free cash flow for the quarter, a short-term $25 million term loan maturing June 30, 2026 that requires a recapitalization, and continued reliance on discounts to clear legacy inventory. Overall the company shows tangible operational momentum but remains exposed to capital-structure and cash-flow risk until a longer-term financing solution is secured.Positive Updates
Product Reset and Strong Early Product Metrics
Completed a full product reset across all stores in <4 weeks; stores with the new lineup showed 12% higher ARU versus stores with legacy products. ComfortMode (launched Jan, broad rollout Mar 23) drove +15 point improvement in overall NPS and +27 points versus prior entry-level C series; ComfortMode has ~100 bps lower return rate versus the historical product it replaces.
Negative Updates
Significant YoY Revenue Decline
Q1 net sales declined 19% year-over-year (reported $319 million), reflecting weak January/early-February demand due to weather and macro conditions and reduced media investment (-21% investment in Q1 vs prior year).
Read all updates
Q1-2026 Updates
Positive
Negative
Product Reset and Strong Early Product Metrics
Completed a full product reset across all stores in <4 weeks; stores with the new lineup showed 12% higher ARU versus stores with legacy products. ComfortMode (launched Jan, broad rollout Mar 23) drove +15 point improvement in overall NPS and +27 points versus prior entry-level C series; ComfortMode has ~100 bps lower return rate versus the historical product it replaces.
Read all positive updates
Company Guidance
Guidance for Q2 is cautious: the company expects net sales to be down low single digits to flat year‑over‑year, with media investment roughly flat to Q1 but meaningfully higher than last year, and April demand running in line with internal expectations (March demand improved ~6% YoY, the first YoY demand growth in two years). Key metrics underpinning the outlook include Q1 net sales of $319M (‑19% YoY), adjusted EBITDA ~$5.8M, gross margin 57.9% (‑329 bps YoY, with discounting accounting for <100 bps of the decline), adjusted operating expenses $195M (down $42M, ‑18% YoY), Q1 free cash flow use $13.2M (≈$20M favorable to plan, $6M unfavorable vs prior year), ARU ~$6,021 (stores reset with new lineup showed ~12% higher ARU), end‑of‑Q1 liquidity ~$40M with lender amendment adding ~ $55M incremental relief including a $25M term loan due 6/30/2026 and temporary relief from a $30M minimum liquidity covenant through 6/30/26. Product and marketing signals that support the guidance: ComfortMode NPS +15 pts overall (+27 vs prior entry‑level), a ~100 bps lower return rate for ComfortMode, ComfortNext Lux selling at ~ $4,000, e‑commerce demand +5% YoY in April, AI citations +25% YTD, and cost actions identifying >$235M of annualized savings with $200M executed (and a $50M plan ~30% executed YTD); management declined to provide further financial guidance while it pursues strategic and financing options with advisors.Sleep Number Financial Statement Overview
Summary
Income Statement
24
Negative
Balance Sheet
18
Very Negative
Cash Flow
22
Negative
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 1.34B | 1.41B | 1.68B | 1.89B | 2.11B | 2.18B |
| Gross Profit | 777.03M | 832.95M | 1.00B | 1.09B | 1.20B | 1.32B |
| EBITDA | -32.16M | 9.02M | 89.22M | 95.34M | 135.28M | 253.93M |
| Net Income | -173.61M | -131.96M | -20.33M | -15.29M | 36.61M | 153.75M |
Balance Sheet | ||||||
| Total Assets | 641.01M | 680.06M | 860.81M | 950.88M | 953.94M | 919.54M |
| Cash, Cash Equivalents and Short-Term Investments | 1.48M | 1.69M | 1.95M | 2.54M | 1.79M | 2.39M |
| Total Debt | 953.64M | 942.50M | 936.11M | 972.65M | 896.01M | 791.05M |
| Total Liabilities | 1.27B | 1.26B | 1.31B | 1.39B | 1.39B | 1.34B |
| Stockholders Equity | -626.32M | -578.48M | -451.59M | -441.93M | -438.18M | -424.95M |
Cash Flow | ||||||
| Free Cash Flow | -26.62M | -17.69M | 3.64M | -66.08M | -33.32M | 233.11M |
| Operating Cash Flow | -8.09M | -3.28M | 27.14M | -9.03M | 36.14M | 300.01M |
| Investing Cash Flow | -18.53M | -17.69M | -26.29M | -58.35M | -70.61M | -66.64M |
| Financing Cash Flow | 26.41M | 20.71M | -1.44M | 68.13M | 33.87M | -235.22M |
Sleep Number Technical Analysis
Negative
2.53
Price Trends
1.78
Negative
4.22
Negative
5.75
Negative
Market Momentum
-0.49
Positive
27.32
Positive
4.94
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 2.53 is above the 20-day moving average (MA) of 1.04, above the 50-day MA of 1.78, and below the 200-day MA of 5.75, indicating a bearish trend. The MACD of -0.49 indicates Positive momentum. The RSI at 27.32 is Positive, neither overbought nor oversold. The STOCH value of 4.94 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for SNBR.
Sleep Number Risk Analysis
Sleep Number disclosed 2 risk factors in its most recent earnings report. Sleep Number reported the most risks in the "Legal & Regulatory" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Sleep Number Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
69 Neutral | $546.08M | 13.35 | 8.46% | 7.86% | -4.79% | -30.21% | |
65 Neutral | $1.55B | 13.95 | 9.83% | 2.39% | 1.69% | -31.16% | |
61 Neutral | $18.38B | 12.79 | -2.54% | 3.03% | 1.52% | -15.83% | |
58 Neutral | $1.47B | 6.72 | 23.12% | 1.84% | -8.33% | ― | |
50 Neutral | $1.07B | 99.74 | 0.83% | 4.16% | 5.62% | -65.76% | |
41 Neutral | $46.66M | -0.72 | 189.80% | ― | -2.49% | 6.65% | |
38 Underperform | $5.17M | -0.02 | 31.47% | ― | -16.69% | -698.31% |
* Consumer Cyclical Sector Average
SNBR
Sleep Number
0.18
-7.00
-97.55%
ETD
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21.09
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35.06
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LEG
Leggett & Platt
10.85
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PRPL
Purple Innovation
0.42
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-42.47%
Sleep Number Corporate Events
Delistings and Listing ChangesLegal Proceedings
Sleep Number Faces Nasdaq Delisting Following Chapter 11 Filing
Negative
Jun 17, 2026
On June 12, 2026, Sleep Number Corporation and its subsidiaries filed voluntary Chapter 11 bankruptcy petitions in the U.S. Bankruptcy Court for the Southern District of New York. On June 16, 2026, the company received notice that Nasdaq would del...
Legal ProceedingsPrivate Placements and Financing
Sleep Number Secures DIP Financing Amid Chapter 11 Process
Negative
Jun 16, 2026
On June 16, 2026, Sleep Number entered a fourteenth amendment to its credit and security agreement, establishing a debtor-in-possession credit facility of up to $260 million while in Chapter 11 proceedings. The package combines up to $65 million i...
Business Operations and StrategyDelistings and Listing ChangesLegal ProceedingsM&A TransactionsPrivate Placements and Financing
Sleep Number Files Chapter 11, Plans Sale Merger
Negative
Jun 12, 2026
On June 12, 2026, Sleep Number and its subsidiaries filed voluntary Chapter 11 petitions in the U.S. Bankruptcy Court for the Southern District of New York, triggering defaults and acceleration on roughly $672.5 million of debt that are now subjec...
Business Operations and StrategyExecutive/Board ChangesRegulatory Filings and Compliance
Sleep Number Adds Independent Director, Strengthens Board Governance
Positive
Jun 10, 2026
On June 4, 2026, Sleep Number expanded its Board of Directors to seven members with the immediate election of attorney Colin M. Adams, bringing the number of independent directors under Nasdaq standards to six. Adams has no special arrangements ti...
Executive/Board Changes
Sleep Number Grants One-Time Retention Awards to Executives
Neutral
Jun 2, 2026
On May 27, 2026, Sleep Number Corporation’s board approved one-time cash retention awards for key leaders, including its named executive officers, following consultation with independent compensation and financial advisors. In conjunction wi...
Executive/Board ChangesShareholder Meetings
Sleep Number Shareholders Back Directors, Governance Changes Stalled
Neutral
May 27, 2026
At Sleep Number’s 2026 annual meeting, shareholders elected directors Phillip Eyler, Julie Howard and Angel Mendez to three-year terms ending in 2029, and approved on an advisory basis both the company’s executive compensation program ...
Business Operations and StrategyFinancial DisclosuresPrivate Placements and FinancingRegulatory Filings and Compliance
Sleep Number Secures New Financing to Support Turnaround
Positive
Apr 28, 2026
On April 27 and 28, 2026, Sleep Number Corporation amended its credit agreement with existing lenders, securing an additional $55 million of liquidity, including a new $25 million term loan maturing June 30, 2026, and gaining temporary relief from...
Executive/Board Changes
Sleep Number Announces Planned Departure of Board Director
Neutral
Mar 23, 2026
Sleep Number Corporation announced that board member Hilary A. Schneider will depart the Board of Directors following the conclusion of the company’s 2026 Annual Meeting of Shareholders, after deciding on March 17, 2026, not to continue her ...
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.