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

NasdaqGS:SNBR

This month we saw the Sleep Number Society (NASDAQ:SNBR) up an impressive 32%. But this is not enough to compensate for the decline of the last twelve months. Specifically, the stock price fell 57% during this period. The rebound must therefore be considered in this context. The fall may have been an overreaction.

While the past year has been difficult for Sleep Number shareholders, the past week has shown promising signs. So let’s take a look at the longer term fundamentals and see if they were the driver of the negative returns.

See our latest analysis for Sleep Number

In his test The Graham-and-Doddsville super-investors Warren Buffett has described how stock prices don’t always rationally reflect a company’s value. One way to look at how market sentiment has changed over time is to look at the interaction between a company’s stock price and its earnings per share (EPS).

Unfortunately, Sleep Number reported a 42% decline in EPS for the past year. This reduction in EPS is not as severe as the 57% drop in the share price. This suggests that the drop in EPS has made some shareholders more nervous about the company. The P/E ratio of 9.25 also indicates negative market sentiment.

The graph below illustrates the evolution of EPS over time (reveal the exact values ​​by clicking on the image).

NasdaqGS: SNBR Earnings Per Share Growth July 29, 2022

It might be interesting to take a look at our free Sleep Number earnings, revenue and cash flow report.

A different perspective

We regret to report that Sleep Number shareholders are down 57% for the year. Unfortunately, this is worse than the general market decline of 14%. However, it could simply be that the stock price was impacted by greater market jitters. It might be worth keeping an eye on the fundamentals, in case there is a good opportunity. Longer-term investors wouldn’t be so upset, as they would have gained 6%, every year, over five years. It could be that the recent selloff is an opportunity, so it may be worth checking the fundamentals for signs of a long-term growth trend. It is always interesting to follow the evolution of the share price over the long term. But to better understand Sleep Number, we need to consider many other factors. Even so, be aware that Sleep Number is displayed 3 warning signs in our investment analysis and 1 of them concerns…

If you like buying stocks alongside management then you might love this free list of companies. (Hint: insiders bought them).

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

This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts only using unbiased methodology and our articles are not intended to be financial advice. It is not a recommendation to buy or sell stocks and does not take into account your objectives or financial situation. Our goal is to bring you targeted long-term analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price-sensitive companies or qualitative materials. Simply Wall St has no position in the stocks mentioned.

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