Shareholders in Sleep Number Corporation (NASDAQ:SNBR) had a terrible week, as shares crashed 46% to US$7.57 in the week since its latest yearly results. The results look positive overall; while revenues of US$1.7b were in line with analyst predictions, statutory losses were 2.7% smaller than expected, with Sleep Number losing US$0.90 per share. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Sleep Number after the latest results.

See our latest analysis for Sleep Number

After the latest results, the consensus from Sleep Number's five analysts is for revenues of US$1.57b in 2025, which would reflect a perceptible 6.7% decline in revenue compared to the last year of performance. Statutory losses are forecast to balloon 43% to US$0.52 per share. Before this earnings report, the analysts had been forecasting revenues of US$1.72b and earnings per share (EPS) of US$0.45 in 2025. There looks to have been a significant drop in sentiment regarding Sleep Number's prospects after these latest results, with a small dip in revenues and the analysts now forecasting a loss instead of a profit.

The average price target fell 19% to US$11.67, implicitly signalling that lower earnings per share are a leading indicator for Sleep Number's valuation. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. There are some variant perceptions on Sleep Number, with the most bullish analyst valuing it at US$12.00 and the most bearish at US$11.00 per share. Still, with such a tight range of estimates, it suggeststhe analysts have a pretty good idea of what they think the company is worth.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Sleep Number's past performance and to peers in the same industry. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 6.7% by the end of 2025. This indicates a significant reduction from annual growth of 0.1% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 5.0% per year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Sleep Number is expected to lag the wider industry.

The Bottom Line

The most important thing to take away is that the analysts are expecting Sleep Number to become unprofitable next year. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse than the wider industry. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Sleep Number's future valuation.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Sleep Number analysts - going out to 2027, and you can see them free on our platform here.

Before you take the next step you should know about the 3 warning signs for Sleep Number (2 shouldn't be ignored!) that we have uncovered.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.