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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Sleep Number Corporation (XNAS:SNBR) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
SNBR
Name:
SLEEP NUMBER CORPORATION (XNAS:SNBR)
Sector:
4.95M
Industry:
Furnishings, Fixtures & Appliances
CEO:
Ms. Shelly Ibach
Total Employees:
5,515
Our Technological Advancement Rating
Our Rating:
D
Technological advancement compared to industry is -94.99% lower
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF SLEEP NUMBER CORPORATION(SNBR) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND FURNISHINGS, FIXTURES & APPLIANCES INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
41.53
One Month Price Target:
$41.99
Six Month Price Target :
$44.28
Likely Price in One Year's Time:
Ticker:
$47.04
Likely Trading Range Today Under (Normal Volatility)
$41.26
Price Upper limit ($) :
$41.86
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$37.93
This week:
$33.48
This month :
$25.43
Other Primary facts
Market Cap:
866.26M
Market Cap Classification:
Small Cap
Number of Shares
IPO Date:
21.96M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
30.74%
-22.37%
Worst Daily Decline:
Our Options Trading Entry Points
Iron Condor entry points for options expiring in 1 week's time
Low risk (<2%) entry points
Buy Call:
Sell Call:
Buy Put:
Sell Put:
$58.24
$50.59
$24.82
$32.47
Medium risk (<10%) entry points
Buy Call
Sell Call
$48.09
Buy Put:
Sell Put:
$46.46
$34.95
$36.60
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
SNBR
Sharpe Ratio:
1.31%
Comparison:
SNBR, is amongst the top 60% stocks with highest risk-adjusted returns
Sharpe ratio is 17.40% higher than the industry
& is -42.73% lower than the market/S&P 500 average
Average Returns/Yield of
SNBR
Daily returns:
0.06%
Weekly returns:
0.32%
Monthly returns:
1.29%
Yearly returns:
14.35%
Comparison of returns:
Average annual returns/yield (last 3 years) is 7.66% above industry average
Classification:
SNBR, is amongst the top 40% highest yielding stocks in terms of daily returns
Results of T-Test of Returns:
1
Statistical test of Returns:
SNBR has not yielded statistically significant higher returns when compared to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
4.25%
Weekly Volatility:
9.51%
Monthly Volatility:
19.02%
Yearly Volatility:
65.89%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
3.97%
Volatility in last five trading days has been -6.59% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-8.67%
Weekly VaR:
-19.39%
Monthly VaR:
-38.78%
How Much Can the price of
SNBR
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-34%
Worst case (decline):
>85%
This translates to price declining to:
$27.59
This translates to price declining to:
$6.23
Severe Crash Probability
Risk of crash in next 6/12 months: Medium (<50%)
What is Value at Risk (VaR)?
Risk Fundamentals
SNBR is a 173.70% riskier investment compared to the market/S&P 500 & is 134.48% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is 7.71% above industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
SNBR
Beta in relation to market/S&P 500--1.97
Expected beta in 1 year's time:
1.197
Expected beta in 3 year's time:
1.693
Unlevered (debt free) Beta:
4.525
Beta in relation to Nasdaq (XNAS):
1.098
Beta in relation to all global stocks::
0.987
Beta Comparison & Analysis
Beta of competitors/peers::
1.453
Beta is 35.87% higher than peers
Average Industry Beta:
1.707
Beta is 15.64% above industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
-
-
Alpha provided | Alpha Analysis
Alpha provided:
-0.012
Alpha is 148.12% above industry average alpha yield
Alpha is -78% below the market average
Analysis of Cost of Capital of
SNBR
Equity cost of capital:
0.167
Equity cost of capital is 12.32% above industry mean WACC
Unlevered (without debt) cost of capital:
38.22%
Before-tax cost of debt:
0.90%
After-tax cost of debt:
0.71%
Overall debt rating:
Highest AAA investment grade
Weighted average cost of capital (WACC):
0.71%
WACC is -75.18% below industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$97.61
Revenue growth rate per share of (3Y):
-1.94
Annual revenue growth rate is 86.51% above the industry average
EPS:
$3.66
Expected Annual growth rate of EPS (3Y):
30.37%
Expected future EPS growth rate is 149.81% higher than the Furnishings, Fixtures & Appliances industry
Free cash flow (FCF) per share:
$6.02
-
-
Debt per share
$15.41
EBITDA per share
$8.34
Valuation Analysis Today of
SNBR
P/E Ratio:
9.63
P/E Ratio of Competitors/Peers:
45.52
P/E ratio is -78.84% lower than main peers & is -40.43% lower than the industry
Stock price/value with industry average P/E ratio: $59.19
SNBR is -29.84% undervalued if valued using industry average P/E ratio
-
-
P/S (Price to Sales ratio):
0.43
Price to sales ratio is -53.57% below the industry mean
P/B (Price to book value ratio):
-1.94
Price to free cash flow: 6.89
-
Net income growth rate (3Y):
218.62%
Net income growth rate is -389.38% lower than the industry average net income growth rate
Dividend Analysis
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Dividend History:
--$0.00
--$0.00
--$0.00
--$0.00
--$0.00
--$0.00
-
In-depth Debt & Leverage Analysis
Debt to equity ratio:
-72.15%
Net debt to equity ratio:
-175.66%
Debt to assets ratio:
37.10%
Net debt to assets ratio:
90.32%
Debt-to-asset ratio is -50.06% below industry average
Ability to repay debt:
Interest coverage ratio:
24.77
Interest coverage ratio is -72.70% less than industry average
Looking forward:
Debt growth rate:
155.13%
Annual debt growth is -33% lower than industry average debt growth rate
Debt repayment rate in last quarter: 0.00%
Analysis of Key Statistics
Correlation of price movement with the market:
0.503
Statistical significance of correlation:
SNBR has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.556
Stock price is -9.53% less correlated with the market compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.556
Correlation of price movement with Nasdaq (^IXIC):
-0.026
Covariance of price movement with the market:
-0.064
Kurtosis
10.25
Returns have a significant fat-tails (leptokurtic), i.e., returns considerably higher or lower than the mean returns are more probable, compared to assets with normally distributed returns
Skewness of returns:
0.969
Returns are right (positive) skewed; mean returns are greater than median and mode returns
Fundamental Analysis & Dupont Analysis of
SNBR
Gross Profit Margin Ratio:
236%
Operating Profit Margin Ratio:
5.67%
Operating profit margin is -23.36% lower than the industry
Net Profit Margin Ratio:
236%
Effective Tax Rate:
21.86%
Effective tax rate is 18.39% higher than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
-19.01%
Return on equity (ROE) is -164.81% lower than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
9.77%
Return on assets (ROA) is 9.07% higher than the industry
Financial Leverage:
1.6x
Current Ratio:
0.2
Current ratio is -86.84% below industry average
Cash Conversion Cycle (days):
-53.2
Cash conversion cycle is -194.88% below industry average
The remaining useful life of property plant & equipment is: 1.0 years
Stock based compensation to net income ratio:
4.63%
In-depth Efficiency Analysis
Revenue generated per employee:
388.7K
Each employee generates -11% less revenue than industry average revenue per employee
EBITDA generated per employee:
33.2K
Each employee generates -12% less EBITDA than industry average revenue per employee
Profit generated per employee:
16.2K
Each employee generates -23% less net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
0.9K
Each employee generates -107% less free cash flow than industry average revenue per employee
Assets/Capital per employee
130.7K
Each employee generates -107% less free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
Research & development (R&D) investment growth rate-- 17.05%
Growth rate in R&D investment/expenditure is -1080.14% lower than the industry
Competitors/Peer firms of
SNBR
PACTIV EVERGREEN INC. (XNAS:PTVE)
JACK IN THE BOX INC. (XNAS:JACK)
BED BATH & BEYOND INC. (XNAS:BBBY)
RUSH ENTERPRISES, INC. (XNAS:RUSHB)
BLOOMIN' BRANDS, INC. (XNAS:BLMN)
MAKEMYTRIP LIMITED (XNAS:MMYT)
HOVNANIAN ENTERPRISES, INC. (XNAS:HOVNP)
WW International, Inc. (XNAS:WW)
BAOZUN INC. (XNAS:BZUN)
Current Analyst Ratings
Strong buy�4%
Buy�8%
Hold�13%
Sell�8%
Strong sell�0%
Overall analyst sentiment is: Hold
Income Statement
Period:
TTM
Date:
4/2/22
Revenue:
2.14B
Cost of Revenue:
Gross Profit:
R&D Expense
General & Admin Expenses:
Selling, General & Admin Expenses
Sales and Marketing Expenses
Other Expenses :
Operating Expenses :
Cost & Expenses :
Interest Income:
Interest Expenses:
Depreciation & Amortization:
EBITDA:
Operating Income:
Other Income Expenses:
Income Before Tax:
Income Tax Expense:
Net Income:
Balance Sheet
Date:
Calendar Year:
Period:
Cash & Cash Equivalents:
Short Term Investments:
Cash & Short Term Investments:
Net Receivables:
Inventory:
Other Current Assets:
Total Current Assets:
PP&E:
Goodwill:
Intangible Assets:
Long Term Investments:
Tax Assets:
Other Non-Current Assets:
Total Non-Current Assets:
Other Assets:
Total Assets:
Accounts Payable:
Short Term Debt:
Tax Payables:
Deferred Revenue:
Other Current Liabilities:
Total Current Liabilities:
Long Term Debt:
Other Non-Current Liabilities:
Total Non Current Liabilities:
Other Liabilities:
Total Liabilities:
Common Stock:
Retained Earnings:
Accumulated Other Comprehensive Loss:
Other Total Stockholders' Equity:
Total Stockholders' Equity:
Total Liabilities and Stockholders' Equity:
Total Investments:
Total Debt:
Net Debt:
878.60M
1.27B
61.56M
160.14M
1.08B
922.00M
-
1.14B
-
7.40M
61.63M
183.15M
121.53M
89.19M
114.13M
24.95M
89.19M
Statement of Cash Flow
Date:
Period:
15.87M
Differed Income Tax :
- 376.00K
Stock Based Compensation :
4.13M
Change in Working Capital :
2.76M
Accounts Receivables:
1.22M
Other Working Capital:
- 8636.00K
Other Non-Cash Items:
93.00K
Net Cash Provided by Operating Activities:
24.56M
Investments in PP&E:
- 19604.00K
Net Acquisitions:
-
Purchases of Investments:
-
Sales/Maturities of Investments:
Other Investing Activities:
Net Cash Used for Investing Activities:
Debt Repayment:
Common Stock Issued:
Common Stock Repurchased:
Dividend Paid:
Other Financing Activities:
Net Cash Used Provided by Financing Activities:
Effect of FOREX on Changes in Cash:
Net Changes in Cash:
Cash at End of Period:
Cash at Beginning of Period:
Operating Cash Flow:
Capital Expenditure:
Free Cash Flow (FCF):
4/2/22
2022
Q1
1.56M
-
1.56M
24.50M
103.21M
62.63M
191.90M
572.29M
-
-
-
-
78.53M
720.69M
-
912.59M
177.03M
487.25M
26.29M
142.01M
131.66M
937.94M
338.53M
105.02M
443.86M
-
1.38B
222.00K
- 469435.00K
-
-
April 2, 2022 at 6:00:00 AM
2.02B
- 469213.00K
912.59M
-
825.77M
824.2M
-
10.00K
- 19594.00K
-
531.00K
- 50998.00K
-
44.67M
- 5797.00K
-
- 833.00K
1.56M
2.39M
24.56M
- 19604.00K
4.95M
Our Proprietary Portfolio Rating
Our Rating:
D
Price Forecast/Expected Price in Next 5 Years of
SNBR
2023
2024
2025
2026
2027
$47.28
$107.83
$122.13
$138.33
$156.68