Sleep Number (NASDAQ:SNBR) earnings and shareholder returns have been trending downwards for the last year, but the stock surges 12% this past week

This month, we saw the Sleep Number Corporation (NASDAQ:SNBR) up an impressive 32%. But that's not enough to compensate for the decline over the last twelve months. Specifically, the stock price slipped by 57% in that time. So the bounce should be viewed in that context. It may be that the fall was an overreaction.

While the last year has been tough for Sleep Number shareholders, this past week has shown signs of promise. So let's look at the longer term fundamentals and see if they've been the driver of the negative returns.

See our latest analysis for Sleep Number

In his essay The Superinvestors of Graham-and-Doddsville Warren Buffett described how share prices do not always rationally reflect the value of a business. One way to examine how market sentiment has changed over time is to look at the interaction between a company's share price and its earnings per share (EPS).

Unfortunately Sleep Number reported an EPS drop of 42% for the last year. This reduction in EPS is not as bad as the 57% share price fall. This suggests the EPS fall has made some shareholders are more nervous about the business. The P/E ratio of 9.25 also points to the negative market sentiment.

The graphic below depicts how EPS has changed over time (unveil the exact values by clicking on the image).

It might be well worthwhile taking a look at our free report on Sleep Number's earnings, revenue and cash flow.

A Different Perspective

We regret to report that Sleep Number shareholders are down 57% for the year. Unfortunately, that's worse than the broader market decline of 14%. However, it could simply be that the share price has been impacted by broader market jitters. It might be worth keeping an eye on the fundamentals, in case there's a good opportunity. Longer term investors wouldn't be so upset, since they would have made 6%, each year, over five years. It could be that the recent sell-off is an opportunity, so it may be worth checking the fundamental data for signs of a long term growth trend. It's always interesting to track share price performance over the longer term. But to understand Sleep Number better, we need to consider many other factors. Even so, be aware that Sleep Number is showing 3 warning signs in our investment analysis , and 1 of those is concerning...

If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: insiders have been buying them).

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on US exchanges.

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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.