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Sleep Number (SNBR) Gains But Lags Market: What You Should Know

Zacks Equity Research
·3 min read

Sleep Number (SNBR) closed at $88.11 in the latest trading session, marking a +0.3% move from the prior day. The stock lagged the S&P 500's daily gain of 0.55%. At the same time, the Dow added 0.18%, and the tech-heavy Nasdaq gained 1.03%.

Heading into today, shares of the seller of beds, mattresses and bedding products had gained 6.27% over the past month, outpacing the Consumer Discretionary sector's gain of 3.37% and the S&P 500's gain of 3.13% in that time.

Investors will be hoping for strength from SNBR as it approaches its next earnings release. On that day, SNBR is projected to report earnings of $1.33 per share, which would represent year-over-year growth of 62.2%. Meanwhile, our latest consensus estimate is calling for revenue of $547.20 million, up 24.03% from the prior-year quarter.

Investors might also notice recent changes to analyst estimates for SNBR. These revisions help to show the ever-changing nature of near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Our research shows that these estimate changes are directly correlated with near-term stock prices. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Over the past month, the Zacks Consensus EPS estimate remained stagnant. SNBR currently has a Zacks Rank of #2 (Buy).

Investors should also note SNBR's current valuation metrics, including its Forward P/E ratio of 20.33. For comparison, its industry has an average Forward P/E of 16.62, which means SNBR is trading at a premium to the group.

We can also see that SNBR currently has a PEG ratio of 1.06. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. Furniture stocks are, on average, holding a PEG ratio of 1.07 based on yesterday's closing prices.

The Furniture industry is part of the Consumer Discretionary sector. This group has a Zacks Industry Rank of 23, putting it in the top 10% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Make sure to utilize Zacks. Com to follow all of these stock-moving metrics, and more, in the coming trading sessions.

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