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Sleep: The Next Frontier for Investors? (SNBR, APYP, CSPR)

There’s one thing that doesn’t change regardless of monetary policy, economic cyclicality, politics, technicals, or even pandemics: everyone sleeps a third of their life. That adds up to over 23 trillion hours of sleeping happening by human consumers every year.

Companies able to add value in that market have a built-in bonanza to tap into that remarkably contains a disproportionately minor level of competition.

With strong stimulus going out the door, global central banks set on easy, and the vaccine distribution timeline running ahead of schedule in major OECD economies, spending on elevating sleep quality could be primed to jump.

With that in mind, we take a look at some of the current leaders among stocks addressing the sleep tech market opportunity, including: Sleep Number Corporation (NASDAQ:SNBR), APPYEA Inc (OTCMKTS:APYP), and Casper Sleep Inc (NYSE:CSPR).

 

Sleep Number Corporation (NASDAQ:SNBR) frames itself as a company that provides sleep solutions and services in the United States. The company designs, manufactures, markets, retails, and services beds, pillows, sheets, and other bedding products under the Sleep Number name.

It also offers adjustable bases under the FlextFit name; temperature-balancing products, including DualTemp layer; SleepIQ Kids k2 beds for kids; and smart beds under the Sleep Number 360 and 360 names. The company sells its products directly to consumers through retail, online, phone, and chat as well as through wholesale. As of January 2, 2021, it operated approximately 602 retail stores in 50 states.

Sleep Number Corporation (NASDAQ:SNBR) most recently reported results for the year ended January 2, 2021, including a net sales increase of 9% to $1.86 billion in 2020, with a 6% comparable sales gain, 1.5 percentage points (ppt.) of growth from new stores, and 2.5 ppt. of growth from the extra week.

“In a year of challenge and change, our mission-driven team delivered exceptional results by leveraging the power of vertical integration, digitization and focusing on what matters most to our stakeholders,” said Shelly Ibach, President and Chief Executive Officer. “We broadened our sleep leadership and brand relevance with our revolutionary 360® smart beds as consumers’ increased their understanding of the link between proven quality sleep and wellbeing. With strong momentum in the first quarter and ongoing investments in sleep science-based innovations and digital technologies, we are well-positioned to generate sustainable profitable growth for years to come.”

Even in light of this news, SNBR has had a rough past week of trading action, with shares sinking something like -4% in that time. That said, chart support is nearby, and we may be in the process of constructing a nice setup for some movement back the other way. Shares of the stock have powered higher over the past month, rallying roughly 7% in that time on strong overall action.

Sleep Number Corporation (NASDAQ:SNBR) managed to rope in revenues totaling $567.9M in overall sales during the company’s most recently reported quarterly financial data — a figure that represents a rate of top line growth of 28.7%, as compared to year-ago data in comparable terms. In addition, the company is battling some balance sheet hurdles, with cash levels struggling to keep up with current liabilities ($4.2M against $655.9M, respectively).

 

APPYEA Inc (OTCMKTS:APYP) offers a patented unique treatment for snoring and sleeping disorders that uses a wristband to communicate with a smart phone.

According to company materials, when the device detects any irregular breathing patterns or snoring, the wristband vibrates at a gently level that is not enough to wake the subject, but just enough to transition them into a lighter sleep phase that after repeated use, trains the brain to breath properly.

APPYEA Inc (OTCMKTS:APYP) most recently announced that it has a non-binding Letter of Intent with SleepX Ltd. from Israel. Todd Violette and Bary Molchadsky signed a binding agreement for Mr. Molchadsky to acquire the control block of APYP based upon certain conditions being met by March 8, 2021.

According to its release, “based upon legal advice regarding the South Dakota Business Corporation Act, Mr. Violette’s control build needs to be ratified by the shareholders. Preparing the legal document necessary to engage in any business transaction are taking additional time to prepare appropriately. The current estimate is a further three weeks for the AppYea lawyers to draft the proper paperwork for the shareholder’s information statement.”

APYP shares have been in rally mode, running about 1,900% higher over the past 3 months. However, the stock has pulled back to key support over the past month and may be worth a close look at present levels.

APPYEA Inc (OTCMKTS:APYP) generated minor sales according to information released in the company’s most recent quarterly financial report. However, given recent moves by the company, we could see a sharp change in its financial performance trajectory as it begins to tap into the potential of its SleepX opportunity.

 

Casper Sleep Inc (NYSE:CSPR) frames itself as a “sleep company” with a full portfolio of obsessively engineered sleep products—including mattresses, pillows, bedding, and furniture designed in-house by the Company’s award-winning R&D team at Casper Labs.

In addition to its e-commerce business, Casper owns and operates Sleep Shops across North America and its products are available at a growing list of retailers.

Casper Sleep Inc (NYSE:CSPR) recently announced financial results for the quarter ended December 31, 2020 and the year ended December 31, 2020, including a revenue increase of 18.4% to a record $150.3 million on a quarterly basis and by 13.1% to a record $497.0 million for the year.

“Casper finished 2020 strongly with record revenue for both the fourth quarter and the full year,” said Chief Executive Officer Philip Krim. “Fourth quarter revenue growth was driven by 43% year-over-year growth in North American retail partnership revenue and 19% growth in North American direct-to-consumer revenue, which resulted in an 80% year-over-year improvement in Adjusted EBITDA. Despite the pandemic, we were able to deliver 17.4% North American revenue growth for the full year 2020, and we expect top-line growth to accelerate in 2021 with positive Adjusted EBITDA in the second half of the year.”

Even with that news, the action hasn’t really heated up in the stock, with shares moving net sideways over the past week. Over the past month, shares of the stock have suffered from clear selling pressure, dropping by roughly -14%.

Casper Sleep Inc (NYSE:CSPR) generated sales of $150.3M, according to information released in the company’s most recent quarterly financial report. That adds up to a sequential quarter-over-quarter growth rate of 21.7% on the top line. In addition, the company is battling some balance sheet hurdles, with cash levels struggling to keep up with current liabilities ($92.1M against $119.3M, respectively).

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Published by Chris Brown

About Me: I have a Phd in Economics Gender: Male Interests: Playing games like cricket, volleyball Favorite Music: hip hop, rock, jazz

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