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Purple Innovation Beats Analysts’ Expectations in Q1, Raises 2021 Outlook

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Purple Innovation Inc (PRPL) rose almost 3% on May 17 after the comfort technology company announced strong first-quarter results. Purple Innovation designs and manufactures mattresses, pillows, and cushions.

Net sales of $186.4 million surpassed the Street’s estimates of $167.2 million and jumped 52.3% from the year-ago period. The increase was attributed to strong growth for products across both the direct-to-consumer (DTC) and wholesale channels.

Earnings soared 112.5% to $0.17 per share, beating consensus estimates of $0.10 per share.

DTC and wholesale revenue increased 54.8% and 47.6%, respectively, on a year-over-year basis.

Purple Innovation CEO Joe Megibow said, “Looking ahead, our plans are firmly around providing customers with innovative comfort solutions through our omni-channel retail strategy. This includes upgrading our digital capabilities in order to better integrate our multiple product categories and enhance the online shopping experience, accelerating the rollout of Purple showrooms, and strengthening our wholesale relationships. We’ve built a great foundation and we are very excited to leverage the many strengths of our organization to capitalize on the tremendous opportunities that exist for our business.” (See Purple Innovation stock analysis on TipRanks)

For Q2, the company expects revenue to be in the range of $200 – $210 million, versus the consensus estimate of $194.1 million.

For 2021, the company projects revenue to land in between $860 and $900 million, up from the previous range of $840 – $880 million. The consensus estimate for the same is pegged at $860.97 million.

On May 11, Oppenheimer analyst Brian Nagel maintained a Buy rating and a price target of $45 (40.5% upside potential).

Nagel said, “For some time, we have recommended PRPL as a tech-driven disruptor within the expansive market for premium mattresses and one of the more exciting growth and market share expansion stories across consumer.”

Consensus among analysts is a Strong Buy based on 9 unanimous Buys. The average analyst price target stands at $38.38 and implies upside potential of 19.9% to current levels. Shares have exploded 144.1% over the past year.

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