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    Sleep Number Corporation's (NASDAQ:SNBR) Shares Climb 38% But Its Business Is Yet to Catch Up

    Simply Wall St·01/17/2026 12:16:02
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    Despite an already strong run, Sleep Number Corporation (NASDAQ:SNBR) shares have been powering on, with a gain of 38% in the last thirty days. Not all shareholders will be feeling jubilant, since the share price is still down a very disappointing 29% in the last twelve months.

    Although its price has surged higher, there still wouldn't be many who think Sleep Number's price-to-sales (or "P/S") ratio of 0.2x is worth a mention when the median P/S in the United States' Specialty Retail industry is similar at about 0.5x. While this might not raise any eyebrows, if the P/S ratio is not justified investors could be missing out on a potential opportunity or ignoring looming disappointment.

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    Check out our latest analysis for Sleep Number

    ps-multiple-vs-industry
    NasdaqGS:SNBR Price to Sales Ratio vs Industry January 17th 2026

    What Does Sleep Number's P/S Mean For Shareholders?

    Sleep Number could be doing better as its revenue has been going backwards lately while most other companies have been seeing positive revenue growth. Perhaps the market is expecting its poor revenue performance to improve, keeping the P/S from dropping. If not, then existing shareholders may be a little nervous about the viability of the share price.

    If you'd like to see what analysts are forecasting going forward, you should check out our free report on Sleep Number.

    How Is Sleep Number's Revenue Growth Trending?

    In order to justify its P/S ratio, Sleep Number would need to produce growth that's similar to the industry.

    Retrospectively, the last year delivered a frustrating 17% decrease to the company's top line. This means it has also seen a slide in revenue over the longer-term as revenue is down 32% in total over the last three years. So unfortunately, we have to acknowledge that the company has not done a great job of growing revenue over that time.

    Shifting to the future, estimates from the four analysts covering the company suggest revenue should grow by 0.8% per year over the next three years. That's shaping up to be materially lower than the 7.6% per annum growth forecast for the broader industry.

    With this information, we find it interesting that Sleep Number is trading at a fairly similar P/S compared to the industry. It seems most investors are ignoring the fairly limited growth expectations and are willing to pay up for exposure to the stock. These shareholders may be setting themselves up for future disappointment if the P/S falls to levels more in line with the growth outlook.

    What Does Sleep Number's P/S Mean For Investors?

    Its shares have lifted substantially and now Sleep Number's P/S is back within range of the industry median. While the price-to-sales ratio shouldn't be the defining factor in whether you buy a stock or not, it's quite a capable barometer of revenue expectations.

    Given that Sleep Number's revenue growth projections are relatively subdued in comparison to the wider industry, it comes as a surprise to see it trading at its current P/S ratio. At present, we aren't confident in the P/S as the predicted future revenues aren't likely to support a more positive sentiment for long. A positive change is needed in order to justify the current price-to-sales ratio.

    We don't want to rain on the parade too much, but we did also find 3 warning signs for Sleep Number (2 are a bit concerning!) that you need to be mindful of.

    If strong companies turning a profit tickle your fancy, then you'll want to check out this free list of interesting companies that trade on a low P/E (but have proven they can grow earnings).