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1. Company Snapshot

1.a. Company Description

Purple Innovation, Inc.designs and manufactures mattresses, pillows, and cushions.The company also offers bases, foundations, sheets, mattress protectors, bed frames, seat cushions, weighted blankets, and duvets, as well as pet beds.


It markets and sells its products through its e-commerce online channels retail brick-and-mortar wholesale partners, and third-party online retailers, as well as through Purple retail showrooms.The company was founded in 2010 and is headquartered in Lehi, Utah.

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1.b. Last Insights on PRPL

Purple Innovation's recent performance was negatively impacted by a quarterly loss of $0.08 per share, despite a slight beat on revenue estimates. The company's Q3 2025 earnings call highlighted progress in its profitability turnaround, with improved net loss and positive adjusted EBITDA. However, the mattress firm's rollout and growth in the premium segment are being closely watched. According to Raymond James & Associates, Inc., the company's Rejuvenate 2.0 product and brand momentum are key areas of focus. A share buyback program was not mentioned, but the company's valuation and earnings are being compared to peers like Kenvue.

1.c. Company Highlights

2. Purple Innovation's Q3 Earnings: A Step in the Right Direction

Purple Innovation's third-quarter earnings report presented a mixed bag, with revenues of $118.8 million, slightly up from $118.6 million last year, and a gross margin of 42.8%, significantly improved from 29.7% in the prior year period. The company's adjusted EBITDA was positive, consistent with expectations. The earnings per share (EPS) came in at -$0.08, beating estimates of -$0.09. The company's revenue growth was driven by the expansion of its partnership with Mattress Firm, with Purple products now represented in nearly 9,200 slots.

Publication Date: Nov -26

📋 Highlights
  • Revenue Growth:: Q3 revenue reached $118.8 million, slightly up from $118.6 million in the prior year.
  • Gross Margin Improvement:: Adjusted gross margin expanded to 42.8% (40.5% last year), driven by cost reductions and plant consolidation.
  • Wholesale Expansion:: Mattress Firm partnership enabled 9,200 retail slots, contributing to 8% wholesale revenue growth.
  • Cost Savings:: Annual fixed cost reductions of $25–$30 million achieved through restructuring, with $40 million monthly revenue breakeven.
  • Product Success:: Rejuvenate 2.0 drove 6.5% showroom sales gains and 76% of showrooms profitable in Q3 (vs. 56% in 2024).

Operational Highlights

The company's operational performance was a key highlight, with the Rejuvenate mattress collection, Rejuvenate 2.0, outperforming initial expectations and driving a 6.5% showroom sales gain. Wholesale revenue grew 8% during the quarter, supported by the expansion of the Mattress Firm partnership. E-commerce revenue was down 10%, but showed early signs of improvement following a site refresh and growing traction with Amazon. As Robert DeMartini noted, the company's innovation remains at the heart of its competitive advantage, with the Rejuvenate 2.0 launch being one of the most successful product introductions in its history.

Gross Margin Expansion

The company's gross margin expansion was a significant positive, driven by the restructuring efforts and plant consolidation. The company achieved a gross margin of 42.8% in Q3, and expects to maintain a 40% gross margin going forward. The mix shift towards premium products is expected to offset the impact of a higher wholesale mix. With a reduced breakeven point of $40 million in monthly revenue, the company can quickly scale to profitability.

Valuation Metrics

Looking at the valuation metrics, Purple Innovation's Price-to-Sales Ratio stands at 0.18, indicating that the company's revenue growth is not fully priced in. The EV/EBITDA ratio is -58.43, suggesting that the company's adjusted EBITDA is still negative, but improving. The company's ROE is 1077.59%, driven by the significant improvement in net income. Analysts estimate next year's revenue growth at 12.7%, indicating a positive outlook for the company's top-line growth.

Guidance and Outlook

3. NewsRoom

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Contrasting Grocery Outlet (NASDAQ:GO) & Purple Innovation (NASDAQ:PRPL)

Dec -01

Source: defenseworld.net

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Purple Innovation, Inc. (PRPL) Q3 2025 Earnings Call Transcript

Nov -05

Source: seekingalpha.com

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Purple Innovation (PRPL) Reports Q3 Loss, Misses Revenue Estimates

Nov -04

Source: zacks.com

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Purple Innovation Reports Third Quarter 2025 Results

Nov -04

Source: prnewswire.com

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Purple Innovation to Report Third Quarter 2025 Results on November 4, 2025

Oct -29

Source: prnewswire.com

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Analyzing Kenvue (NYSE:KVUE) and PURPLE INNOVATION (NASDAQ:PRPL)

Oct -29

Source: defenseworld.net

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Purple Innovation, Inc. (PRPL) Q2 2025 Earnings Call Transcript

Jul -30

Source: seekingalpha.com

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Purple Innovation (PRPL) Reports Q2 Loss, Beats Revenue Estimates

Jul -29

Source: zacks.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (5.05%)

6. Segments

Sleep Products

Expected Growth: 5%

Purple Innovation's sleep products growth is driven by increasing consumer focus on health and wellness, rising demand for online mattress purchases, and the company's innovative products featuring Smart Comfort Grid technology. Additionally, strategic marketing efforts, expanding distribution channels, and growing brand awareness contribute to the 5% growth rate.

Other

Expected Growth: 7%

Purple Innovation's 'Other' segment, with 7% growth, is driven by increasing demand for its comfort technology products, expansion into new markets, and strategic partnerships. Additionally, the company's focus on e-commerce and digital marketing efforts have contributed to the segment's growth.

7. Detailed Products

Purple Mattresses

Purple Innovation's flagship product, offering a unique Smart Comfort Grid technology that provides optimal support and pressure relief for a restful night's sleep.

Purple Pillows

Designed to work in harmony with Purple Mattresses, these pillows feature the same Smart Comfort Grid technology to provide optimal support and pressure relief for the head and neck.

Purple Bed Frames

Stylish and durable bed frames designed to elevate the sleeping experience, featuring a modern aesthetic and sturdy construction.

Purple Bedding

Soft, breathable, and comfortable bedding solutions designed to work in harmony with Purple Mattresses, featuring a range of materials and styles.

Purple Pet Bed

A comfortable and supportive pet bed designed specifically for pets, featuring the same Smart Comfort Grid technology as Purple Mattresses.

8. Purple Innovation, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Purple Innovation, Inc. faces moderate threat from substitutes due to the presence of alternative mattress brands and online retailers, but the company's unique products and brand recognition mitigate this threat to some extent.

Bargaining Power Of Customers

Purple Innovation, Inc. has a relatively low bargaining power of customers due to its strong brand reputation, unique products, and limited price sensitivity among customers.

Bargaining Power Of Suppliers

Purple Innovation, Inc. has a moderate bargaining power of suppliers due to the presence of multiple suppliers for raw materials, but the company's dependence on a few key suppliers for critical components limits its negotiating power.

Threat Of New Entrants

Purple Innovation, Inc. faces a high threat of new entrants due to the relatively low barriers to entry in the mattress industry, and the increasing popularity of online mattress sales.

Intensity Of Rivalry

Purple Innovation, Inc. operates in a highly competitive industry with many established players, leading to a high intensity of rivalry among competitors.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 27.55%
Debt Cost 3.95%
Equity Weight 72.45%
Equity Cost 13.71%
WACC 11.02%
Leverage 38.02%

11. Quality Control: Purple Innovation, Inc. passed 1 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Lovesac

A-Score: 3.9/10

Value: 8.1

Growth: 7.4

Quality: 4.3

Yield: 0.0

Momentum: 1.5

Volatility: 2.3

1-Year Total Return ->

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Stock-Card
Purple Innovation

A-Score: 3.9/10

Value: 10.0

Growth: 2.6

Quality: 4.6

Yield: 0.0

Momentum: 5.0

Volatility: 1.3

1-Year Total Return ->

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Stock-Card
Aterian

A-Score: 3.8/10

Value: 9.8

Growth: 6.9

Quality: 4.8

Yield: 0.0

Momentum: 0.0

Volatility: 1.3

1-Year Total Return ->

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Stock-Card
Sleep Number

A-Score: 2.7/10

Value: 8.8

Growth: 2.2

Quality: 3.9

Yield: 0.0

Momentum: 0.5

Volatility: 1.0

1-Year Total Return ->

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Stock-Card
Traeger

A-Score: 2.7/10

Value: 6.9

Growth: 4.8

Quality: 2.0

Yield: 0.0

Momentum: 0.5

Volatility: 1.7

1-Year Total Return ->

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Stock-Card
iRobot

A-Score: 2.5/10

Value: 9.8

Growth: 1.0

Quality: 4.0

Yield: 0.0

Momentum: 0.0

Volatility: 0.0

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

0.75$

Current Price

0.75$

Potential

-0.00%

Expected Cash-Flows