Bearish: Analysts Just Cut Their Sleep Number Corporation (NASDAQ:SNBR) Revenue and EPS estimates

Market forces rained on the parade of Sleep Number Corporation (NASDAQ:SNBR) shareholders today, when the analysts downgraded their forecasts for next year. Revenue and earnings per share (EPS) forecasts were both revised downwards, with analysts seeing grey clouds on the horizon.

Following the downgrade, the consensus from five analysts covering Sleep Number is for revenues of US$1.8b in 2024, implying a perceptible 7.7% decline in sales compared to the last 12 months. Statutory earnings per share are presumed to bounce 221% to US$0.65. Before this latest update, the analysts had been forecasting revenues of US$2.1b and earnings per share (EPS) of US$1.92 in 2024. Indeed, we can see that the analysts are a lot more bearish about Sleep Number's prospects, administering a substantial drop in revenue estimates and slashing their EPS estimates to boot.

View our latest analysis for Sleep Number

It'll come as no surprise then, to learn that the analysts have cut their price target 53% to US$12.00.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. We would highlight that sales are expected to reverse, with a forecast 6.2% annualised revenue decline to the end of 2024. That is a notable change from historical growth of 7.3% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 5.7% per year. It's pretty clear that Sleep Number's revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The biggest issue in the new estimates is that analysts have reduced their earnings per share estimates, suggesting business headwinds lay ahead for Sleep Number. Unfortunately analysts also downgraded their revenue estimates, and industry data suggests that Sleep Number's revenues are expected to grow slower than the wider market. With a serious cut to next year's expectations and a falling price target, we wouldn't be surprised if investors were becoming wary of Sleep Number.

After a downgrade like this, it's pretty clear that previous forecasts were too optimistic. What's more, we've spotted several possible issues with Sleep Number's business, like its declining profit margins. Learn more, and discover the 2 other concerns we've identified, for free on our platform here.

Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are downgrading their estimates. So you may also wish to search this free list of stocks that insiders are buying.

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