Sleep Number (SNBR) AI Stock Analysis

• Market Cap: $253.88M
• Dividend Yield: N/A
• Average Volume (3M): 702.55K
• Price to Earnings (P/E): ―
• Beta (1Y): 3.03
• 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): -1.73
• Shares Outstanding: 22,790,000
• 10 Day Avg. Volume: 1,142,307
• 30 Day Avg. Volume: 702,550
• 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: 4.76
• Enterprise Value/Revenue: 0.84
• Enterprise Value/Gross Profit: 1.40
• Enterprise Value/Ebitda: 52.91
• 1Y Price Target: $9.00
• Price Target Upside: -23.79% Downside
• Rating Consensus: Hold
• Number of Analyst Covering: 2
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 48 Neutral
• Price Target: $10.00 ▼(-15.33% Downside)

The score is held down primarily by weak financial performance—declining sales, negative margins, negative equity, and stressed cash flows. Offsetting this, technicals have improved with the stock trading above key moving averages and positive MACD, while the earnings call and recent initiatives (cost-out, credit agreement extension, marketing changes) add some support but still come with near-term cash burn and sales pressure.

Positive Factors

Cost Reduction Execution

Sizable, executed opex reductions are a durable lever to restore operating profitability and extend runway. Sustained lower fixed costs improve operating leverage versus volume, increasing the chance of positive adjusted EBITDA and cash flow as revenue stabilizes, aiding turnaround execution.

Credit Agreement Extension

Extending the credit facility materially reduces near-term refinancing risk and provides covenant flexibility to execute restructuring and growth investments. Lender support buys time to implement structural changes, improving odds of achieving sustainable cash generation before maturities pressure the balance sheet.

Marketing Efficiency Gains

Improved customer acquisition efficiency is a durable driver of unit economics: lower CAC raises ROI on marketing spend, enabling more productive growth investments when marketing is scaled. Persistent CAC improvements support margin recovery and better lifetime value economics over time.

Negative Factors

Revenue Decline & Negative Margins

Ongoing top-line contraction combined with negative operating and net margins signals structural demand or competitive positioning issues. Without a durable reversal in revenue trends, fixed-cost absorption and margin recovery will remain constrained, limiting sustainable profitability improvement.

Negative Equity & High Leverage

Negative equity and elevated leverage materially weaken financial resilience and strategic optionality. This capital structure raises refinancing and covenant risk, increases cost of capital, and likely necessitates recapitalization or sustained cash generation to restore solvency and support long-term investments.

Negative Operating and Free Cash Flow

Persistent negative OCF and FCF undermine the company's ability to fund capex, store consolidation, and product investments internally. Reliance on external financing or covenant amendments increases execution risk and can limit strategic flexibility until consistent positive cash generation is restored.

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 generates revenue primarily through the sale of its customizable mattresses and related sleep products. The company's revenue model is centered around direct-to-consumer sales through its extensive network of retail stores and its e-commerce platform. Key revenue streams include the sale of mattresses, adjustable bases, bedding accessories, and smart sleep technology systems. Additionally, Sleep Number benefits from recurring revenue through the sale of replacement parts and accessories for their products. The company has also established partnerships with various health and wellness organizations to promote the importance of sleep health, which can drive brand awareness and customer loyalty, further contributing to its earnings.

Sleep Number Financial Statement Overview

Summary

Overall financials are weak: revenue is declining (TTM down 5.49%) and profitability is pressured with negative net/EBIT/EBITDA margins. The balance sheet is a major risk due to negative stockholders’ equity and high leverage, while cash flow remains challenged with negative operating and free cash flow in the TTM period.

Income Statement

Sleep Number's income statement reveals a challenging period with declining revenue and profitability. The TTM data shows a negative net profit margin of -2.66% and a gross profit margin of 60.05%, indicating pressure on profitability. Revenue has decreased by 5.49% compared to the previous period, reflecting a downward trend. The EBIT and EBITDA margins are also negative, highlighting operational challenges. Overall, the income statement reflects a need for strategic improvements to reverse the declining trend.

Balance Sheet

The balance sheet shows significant financial leverage with a negative stockholders' equity, resulting in a concerning debt-to-equity ratio. The TTM data indicates a debt-to-equity ratio of -0.69, suggesting high financial risk. Return on equity is positive at 8.03%, but the negative equity position poses a risk to financial stability. The equity ratio is not calculable due to negative equity, underscoring the need for capital restructuring.

Cash Flow

Cash flow analysis reveals substantial challenges with negative operating and free cash flows in the TTM period. The free cash flow growth rate is positive at 268.83%, but this is from a negative base, indicating volatility. The operating cash flow to net income ratio is negative, reflecting cash flow difficulties. The free cash flow to net income ratio is 1.63, suggesting some ability to cover net losses with free cash flow, but overall cash flow stability is a concern.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	1.44B	1.68B	1.89B	2.11B	2.18B	1.86B
Gross Profit	865.25M	1.00B	1.09B	1.20B	1.32B	1.16B
EBITDA	22.84M	89.22M	95.34M	135.28M	253.93M	246.46M
Net Income	-78.11M	-20.33M	-15.29M	36.61M	153.75M	139.19M
Balance Sheet
Total Assets	749.39M	860.81M	950.88M	953.94M	919.54M	800.14M
Cash, Cash Equivalents and Short-Term Investments	1.26M	1.95M	2.54M	1.79M	2.39M	4.24M
Total Debt	940.71M	936.11M	972.65M	896.01M	791.05M	589.36M
Total Liabilities	1.27B	1.31B	1.39B	1.39B	1.34B	1.02B
Stockholders Equity	-521.34M	-451.59M	-441.93M	-438.18M	-424.95M	-223.98M
Cash Flow
Free Cash Flow	-49.98M	3.64M	-66.08M	-33.32M	233.11M	240.59M
Operating Cash Flow	-28.52M	27.14M	-9.03M	36.14M	300.01M	279.66M
Investing Cash Flow	-21.45M	-26.29M	-58.35M	-70.61M	-66.64M	-39.02M
Financing Cash Flow	49.65M	-1.44M	68.13M	33.87M	-235.22M	-237.99M

Sleep Number Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 11.81
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SNBR, the sentiment is Positive. The current price of 11.81 is above the 20-day moving average (MA) of 10.08, above the 50-day MA of 8.37, and above the 200-day MA of 7.95, indicating a bullish trend. The MACD of 0.91 indicates Negative momentum. The RSI at 66.51 is Neutral, neither overbought nor oversold. The STOCH value of 72.71 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for SNBR.

Sleep Number Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
LZB	77 Outperform	$1.54B	17.18	8.82%	2.39%	1.78%	-25.36%
ETD	70 Outperform	$588.06M	13.44	9.21%	7.86%	-4.26%	―
LEG	63 Neutral	$1.65B	7.59	26.20%	1.84%	-6.03%	―
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
MLKN	61 Neutral	$1.40B	-54.03	-1.95%	4.16%	4.34%	-141.36%
SNBR	48 Neutral	$253.88M	-3.46	―	―	-16.95%	-88.00%
PRPL	48 Neutral	$72.85M	-1.26	-9999.00%	―	-9.47%	48.11%

Sleep Number Corporate Events

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.

Sleep Number Appoints New CFO Amid Strategic Shift

On December 2, 2025, Sleep Number Corporation announced the appointment of Amy K. O’Keefe as the new Chief Financial Officer, effective December 8, 2025, succeeding interim CFO Robert P. Ryder. O’Keefe brings over 30 years of experience in financial transformations across various sectors, and her appointment is part of Sleep Number’s strategy to stabilize and grow the business. The company also reaffirmed its full-year 2025 financial guidance and outlined a focused turnaround strategy in an updated investor presentation, emphasizing cost reductions, operational improvements, and financial flexibility.

The most recent analyst rating on (SNBR) stock is a Sell with a $4.00 price target. To see the full list of analyst forecasts on Sleep Number stock, see the SNBR Stock Forecast page.

Sleep Number Secures Credit Agreement Extension

Sleep Number Corporation announced on November 5, 2025, that it has secured an amendment and extension of its credit agreement through 2027, which aligns with its planned turnaround strategy. This updated agreement, reflecting increased covenant levels and expanded addbacks, demonstrates lender confidence and provides financial flexibility, supporting the company’s expectation to comply with new covenants and generate meaningful free cash flow in 2026.

The most recent analyst rating on (SNBR) stock is a Sell with a $5.00 price target. To see the full list of analyst forecasts on Sleep Number stock, see the SNBR Stock Forecast page.

Sleep Number Amends Credit Agreement, Extends Maturity Date

On November 4, 2025, Sleep Number Corporation executed a Twelfth Amendment to its Credit and Security Agreement, extending the maturity date to December 3, 2027, and adjusting various financial covenants and credit facilities. This amendment signifies a strategic financial restructuring for the company, ensuring compliance with all covenants and facilitating the retirement of Board member Stephen L. Gulis, Jr., who stepped down following the amendment’s qualification as a debt refinancing.

The most recent analyst rating on (SNBR) stock is a Sell with a $5.00 price target. To see the full list of analyst forecasts on Sleep Number stock, see the SNBR Stock Forecast page.