SNBR - Sleep Number: Some Light At The End Of The Tunnel

2024-03-18 17:10:52 ET

Summary

• Sleep Number Corporation stock has lost over half its value in the past year, while the benchmark has risen by close to a third.
• We touch upon some of the negative sub-plots that have weighed on the stock.
• Whilst the industry may not grow this year as well, we are encouraged by the steps that the company is taking to address its cost-base and generate free cash flow.
• Given the EBITDA margin improvements in store, we feel valuations look very compelling.
• Sleep Number Corporation stock could benefit from some rotational interest in the discretionary space, whilst the risk-reward on the standalone charts look encouraging.

In A Bad Way...

The stock of Sleep Number Corporation ( SNBR ), a wellness technology company which is considered to be the 3rd largest bedding retailer and etailer in the U.S. (Source: Furniture Today), has likely given a lot of sleepless nights to its shareholders; over the past year, at a time when the key benchmark has risen by close to a third, our focus stock has lost over half its value....

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