Purple Innovation, Inc. (NASDAQ: PRPL)

Sector: Consumer Cyclical Industry: Furnishings, Fixtures & Appliances CIK: 0001643953
Market Cap 76.30 Mn
P/B -2.83
P/E -1.35
P/S 0.17
ROIC (Qtr) -27.63
Div Yield % 0.00
Rev 1y % (Qtr) 0.14
Total Debt (Qtr) 200.11 Mn
Debt/Equity (Qtr) -7.43
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About

Purple Innovation, Inc. (PRPL) is a company that has made significant strides in the sleep products industry through its innovative comfort solutions. With a mission to enhance people's lives through its premium offerings, Purple has developed a range of products that cater to the needs of its customers. The company's primary business activities involve the design, development, and manufacturing of innovative comfort products, which include mattresses, pillows, cushions, bases, sheets, and duvets. These products are designed to provide optimal...

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Investment thesis

Bull case

  • Operating cash flow of (21.27M) provides exceptional 184.95x coverage of minority interest expenses (115000), showing strong core operations.
  • Tangible assets of 295.23M provide exceptional 56.68x coverage of deferred revenue 5.21M, showing strong service capability backing.
  • Robust tangible asset base of 295.23M provides 7.51x coverage of working capital 39.31M, indicating strong operational backing.
  • Retained earnings of (622.07M) represent substantial 23.09x of equity (26.94M), indicating strong internal capital generation.
  • Tangible assets of 295.23M provide robust 6.55x coverage of other current liabilities 45.06M, indicating strong asset backing.

Bear case

  • Investment activities of (7.21M) provide weak support for R&D spending of 9.39M, which is -0.77x, suggesting potentially insufficient investment in innovation relative to other capital deployment.
  • Operating cash flow of (21.27M) provides insufficient coverage of deferred revenue obligations of 5.21M, which is -4.08x, raising concerns about future service delivery capabilities.
  • The company's operating cash flow of (21.27M) shows concerning coverage of stock compensation expenses of 1.97M, with a -10.79 ratio indicating potential earnings quality issues.
  • Operating cash flow of (21.27M) provides minimal -607.69x coverage of tax expenses of 35000, suggesting potential tax planning inefficiencies or unsustainable tax positions.
  • Free cash flow of (28.48M) provides weak coverage of capital expenditures of 7.21M, with a -3.95 ratio suggesting additional external financing needs for growth initiatives.

Contract with Customer, Sales Channel Breakdown of Revenue (2024)

Contract with Customer, Sales Channel Breakdown of Revenue (2024)

Peer comparison

Companies in the Furnishings, Fixtures & Appliances
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 SGI Somnigroup International Inc. 18.99 Bn 125.40 7.03 6.62 Bn
2 SN SharkNinja, Inc. 18.48 Bn 32.14 3.04 0.89 Bn
3 MHK Mohawk Industries Inc 8.23 Bn 19.54 0.77 2.34 Bn
4 PATK Patrick Industries Inc 5.10 Bn 175.24 10.70 1.53 Bn
5 WHR Whirlpool Corp /De/ 4.88 Bn 15.36 0.31 7.19 Bn
6 HNI Hni Corp 2.23 Bn 44.66 1.16 0.46 Bn
7 TILE Interface Inc 2.17 Bn 30.23 2.24 0.39 Bn
8 LEG Leggett & Platt Inc 1.59 Bn 5.64 0.39 1.66 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 0.79 0.98
EV to Cash from Ops. EV/CFO -11.17 -9.92
EV to Debt EV to Debt 1.19 25.70
EV to EBIT EV/EBIT -7.48 17.69
EV to EBITDA EV/EBITDA -11.33 15.96
EV to Free Cash Flow [EV/FCF] EV/FCF -8.34 17.28
EV to Market Cap EV to Market Cap 3.11 1.76
EV to Revenue EV/Rev 0.52 1.40
Price to Book Value [P/B] P/B -2.83 9.34
Price to Earnings [P/E] P/E -1.35 16.89
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) 0.00 1.74
Dividend Payout Ratio % Div Payout % (Qtr) 0.00 9.37
Dividend per Basic Share Div per Share (Qtr) 0.00 0.51
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 0.00 28.74
Interest Coverage Int. cover (Qtr) -1.27 -23.23
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) 41.15 -9.80
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 38.29 70.23
Dividend Growth (1y) % Dividend Growth (1y) % 0.00 0.00
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 66.18 -367.80
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 68.74 -34.93
EBIT Growth (1y) % EBIT 1y % (Qtr) 66.19 -198.55
EBT Growth (1y) % EBT 1y % (Qtr) 47.42 -72.49
EPS Growth (1y) % EPS 1y % (Qtr) 48.51 -131.79
FCF Growth (1y) % FCF 1y % (Qtr) 20.27 0.53
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 6.05 -2.36
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 1.51 1.16
Cash Payout Ratio Cash Payout (Qtr) 0.00 0.13
Cash Ratio Cash Ratio (Qtr) 0.33 0.30
Current Ratio Curr Ratio (Qtr) 1.41 1.96
Debt to Equity Ratio Debt/Equity (Qtr) -7.43 0.57
Interest Cover Ratio Int Coverage (Qtr) -1.27 -23.23
Times Interest Earned Times Interest Earned (Qtr) -1.27 -23.23
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) -0.90 -2.26
EBIT Margin % EBIT Margin % (Qtr) -6.95 -4.46
EBT Margin % EBT Margin % (Qtr) -12.39 -7.49
Gross Margin % Gross Margin % (Qtr) 40.40 33.73
Net Profit Margin % Net Margin % (Qtr) -12.40 -8.04