Sleep Number Corporation (NASDAQ:SNBR) Third-Quarter Results Just Came Out: Here's What Analysts Are Forecasting For Next Year

Shareholders might have noticed that Sleep Number Corporation (NASDAQ:SNBR) filed its quarterly result this time last week. The early response was not positive, with shares down 5.9% to US$12.71 in the past week. Revenues of US$427m came in a modest 4.3% below forecasts. Statutory losses were a relative bright spot though, with a per-share loss of US$0.14 coming in a substantial 35% smaller than what the analysts had expected. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

See our latest analysis for Sleep Number

Following last week's earnings report, Sleep Number's five analysts are forecasting 2025 revenues to be US$1.76b, approximately in line with the last 12 months. Sleep Number is also expected to turn profitable, with statutory earnings of US$0.55 per share. Before this earnings report, the analysts had been forecasting revenues of US$1.81b and earnings per share (EPS) of US$0.59 in 2025. It's pretty clear that pessimism has reared its head after the latest results, leading to a weaker revenue outlook and a minor downgrade to earnings per share estimates.

The analysts made no major changes to their price target of US$13.67, suggesting the downgrades are not expected to have a long-term impact on Sleep Number's valuation. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. There are some variant perceptions on Sleep Number, with the most bullish analyst valuing it at US$16.00 and the most bearish at US$12.00 per share. This is a very narrow spread of estimates, implying either that Sleep Number is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.

Of course, another way to look at these forecasts is to place them into context against the industry itself. We would highlight that Sleep Number's revenue growth is expected to slow, with the forecast 1.0% annualised growth rate until the end of 2025 being well below the historical 1.6% p.a. growth over the last five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 4.8% annually. Factoring in the forecast slowdown in growth, it seems obvious that Sleep Number is also expected to grow slower than other industry participants.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Sleep Number. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At Simply Wall St, we have a full range of analyst estimates for Sleep Number going out to 2026, and you can see them free on our platform here..

Plus, you should also learn about the 3 warning signs we've spotted with Sleep Number (including 2 which are significant) .

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.