Sleep Number (SNBR)
NASDAQ:SNBR
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Sleep Number
(NASDAQ:SNBR)
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Rating:45Neutral
Price Target:
$1.50
▼(-11.76% Downside)
Action:ReiteratedDate:04/10/26
The score is held down primarily by weak financial performance (losses, negative/volatile cash flow, and negative equity with heavy leverage) and a strongly bearish technical trend. The latest earnings call adds partial offset via tangible cost reductions and improving EBITDA/FCF expectations, but near-term revenue declines and liquidity/capital-structure uncertainty remain material. Valuation is neutral-to-weak due to losses and no dividend support.
Positive Factors
Durable gross margins
Stable high gross margins (~57%–60%) indicate durable product economics for Sleep Number’s smart-bed hardware. Even with volume swings, strong gross margins provide structural capacity to restore profitability via SG&A reductions and higher attachment rates, supporting medium-term margin recovery.
Negative Factors
Highly stressed capital structure
Negative equity and debt materially above the asset base create limited financial flexibility and elevate refinancing and covenant risk. This levered capital structure constrains investment, increases the cost of incremental capital, and could force dilutive or disruptive financing actions if operating performance falters.
Read all positive and negative factors
Positive Factors
Negative Factors
Durable gross margins
Stable high gross margins (~57%–60%) indicate durable product economics for Sleep Number’s smart-bed hardware. Even with volume swings, strong gross margins provide structural capacity to restore profitability via SG&A reductions and higher attachment rates, supporting medium-term margin recovery.
Read all positive factors
Sleep Number (SNBR) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$38.87M
Dividend YieldN/A
Average Volume (3M)702.55K
Price to Earnings (P/E)―
Beta (1Y)3.13
Revenue Growth-16.95%
EPS Growth-88.00%
CountryUS
Employees3,600
SectorConsumer Cyclical
Sector Strength84
IndustryFurnishings, Fixtures & Appliances
Share Statistics
EPS (TTM)-2.55
Shares Outstanding22,864,000
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 Cap25.25
Enterprise Value/Revenue0.70
Enterprise Value/Gross Profit1.18
Enterprise Value/Ebitda17.12
Forecast
1Y Price Target
$4.50Price Target Upside164.71% Upside
Rating ConsensusHold
Number of Analyst Covering2
EPS Forecast (FY)-0.47
Revenue Forecast (FY)$1.37B
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...
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 reven...
Sleep Number Earnings Call Summary
Earnings Call Date:Mar 12, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:Apr 29, 2026
Earnings Call Sentiment Positive
The call presented meaningful evidence of a successful operational turnaround: product launch traction (Comfort mode selling well), substantial cost reductions ($185M executed plus $50M identified), improved adjusted EBITDA (beat guidance), and strengthening brand metrics. However, the company continues to face significant top-line pressure (FY sales down 16%, Q4 and Q1 softness), a Q4 inventory obsolescence charge, short-term margin headwinds from clearance activity, and ongoing liquidity and capital-structure work. Overall, the tone is cautiously optimistic — strong early wins and clear operational progress offset by material near-term revenue and liquidity challenges.Positive Updates
Adjusted EBITDA Beat
Full-year adjusted EBITDA of $78 million exceeded prior guidance of $70 million, with pro forma adjusted EBITDA margin approximately 9%, a ~200 basis point improvement versus the prior year.
Negative Updates
Top-Line Pressure and YoY Declines
Q4 net sales were $347 million, down 8% versus the prior year; full-year net sales declined 16% year-over-year (prior year benefited from a 53rd week, ~660 basis points impact).
Read all updates
Q4-2025 Updates
Positive
Negative
Adjusted EBITDA Beat
Full-year adjusted EBITDA of $78 million exceeded prior guidance of $70 million, with pro forma adjusted EBITDA margin approximately 9%, a ~200 basis point improvement versus the prior year.
Read all positive updates
Company Guidance
Sleep Number did not provide formal 2026 guidance but gave directional targets: Q1 net sales are expected to decline in the high‑teens, with a significant sequential improvement in Q2 and double‑digit sales growth in the second half; full‑year adjusted EBITDA is expected to increase in the high‑teens to mid‑20s percent versus 2025’s $78M (2025 pro‑forma adjusted EBITDA margin ≈9%), and the company expects positive free cash flow for 2026; marketing spend is planned roughly flat year‑over‑year but rephased (Q1 down, Q2 up, back half ~flat), capex was $14M in 2025, full‑year 2025 net sales were $1.41B (Q4 $347M, -8% YoY), full‑year 2025 gross margin was 59% (58.4% adjusted in Q4 excluding a $9.6M inventory charge), total liquidity at year‑end was $58M (vs. amended covenant floor $30M), the company cut ~$185M of annualized costs in 2025 with an identified incremental $50M of annualized fixed cost savings to execute in 2026, and management has engaged Guggenheim to evaluate refinancing and other options to improve the capital structure.Sleep Number Financial Statement Overview
Summary
Income Statement
22
Negative
Balance Sheet
14
Very Negative
Cash Flow
24
Negative
| 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 | 942.50M | 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
Negative
1.70
Price Trends
5.74
Negative
6.82
Negative
7.28
Negative
Market Momentum
-1.13
Negative
31.10
Neutral
36.72
Neutral
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 1.7 is below the 20-day moving average (MA) of 2.12, below the 50-day MA of 5.74, and below the 200-day MA of 7.28, indicating a bearish trend. The MACD of -1.13 indicates Negative momentum. The RSI at 31.10 is Neutral, neither overbought nor oversold. The STOCH value of 36.72 is Neutral, 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 1 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 |
|---|---|---|---|---|---|---|---|
70 Outperform | $565.93M | 12.45 | 9.20% | 7.86% | -4.26% | ― | |
65 Neutral | $1.38B | 18.08 | 8.12% | 2.39% | 1.78% | -25.36% | |
61 Neutral | $18.38B | 12.79 | -2.54% | 3.03% | 1.52% | -15.83% | |
58 Neutral | $1.53B | 6.47 | 26.15% | 1.84% | -6.03% | ― | |
50 Neutral | $1.07B | 14.70 | 0.83% | 4.16% | 4.34% | -141.36% | |
47 Neutral | $66.68M | -5.81 | 289.96% | ― | -9.47% | 48.11% | |
45 Neutral | $38.87M | -1.49 | 25.91% | ― | -16.95% | -88.00% |
* Consumer Cyclical Sector Average
SNBR
Sleep Number
1.77
-3.30
-65.09%
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-8.11%
LEG
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PRPL
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0.62
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Sleep Number Corporate Events
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 ...
Business Operations and StrategyFinancial Disclosures
Sleep Number details turnaround progress and transformation plans
Positive
Mar 12, 2026
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, a...
Executive/Board Changes
Sleep Number Names Kelly Baker Principal Accounting Officer
Neutral
Mar 12, 2026
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 ...
Business Operations and StrategyPrivate Placements and Financing
Sleep Number launches strategic partnership with Travis Kelce
Positive
Jan 28, 2026
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 T...
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.