Roth MKM analyst Matt Koranda upgraded the rating on Purple Innovation (PRPL – Research Report) to a Buy today, setting a price target of $2.50.
Matt Koranda has given his Buy rating due to a combination of factors regarding Purple Innovation’s recent performance and future outlook. The company has shown encouraging signs in the fourth quarter, with direct-to-consumer (DTC) growth and healthy gross margin (GM) flow-through, demonstrating strong profitability against consensus expectations. Furthermore, Purple Innovation’s management has provided an EBITDA outlook for 2024 that not only surpasses the consensus but also implies potential for further upside, indicating a positive future trajectory for the company’s earnings.
Koranda’s optimism is further bolstered by Purple Innovation’s strategic moves to solidify its financial position, such as the January 2024 debt refinancing which has alleviated liquidity concerns. The company is also outpacing its competitors, suggesting it is gaining market share within the mattress industry which is currently experiencing cyclical lows in unit volumes. Additionally, there are expectations for both sustained average order value/average unit retail expansion and continued gross margin improvements. These elements, combined with improved operating efficiency and a recalibration of market expectations, lead Koranda to conclude that the downside risks for Purple Innovation have been mitigated, paving the way for a Buy rating.
In another report released today, KeyBanc also reiterated a Buy rating on the stock with a $5.00 price target.
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Purple Innovation (PRPL) Company Description:
Purple Innovation, Inc. engages in the design and manufacture of mattresses, cushions, pillows, and other comfort products. The firm uses Hyper-Elastic Polymer technology. Its products include mattresses, new purple mattress, original purple mattress, bed pillows, seat cushions, mattress protector, and bamboo sheets. The company was founded by Terry V. Pearce and Tony M. Pearce in 2010 and is headquartered in Alpine, Utah.
Read More on PRPL:
- Purple Innovation Reports Fourth Quarter and Full Year 2023 Results
- PURPLE INNOVATION AND TEMPUR SEALY INTERNATIONAL REACH AGREEMENT
- Purple Innovation price target raised to $2 from $1 at Roth MKM
- Purple Innovation Amends CEO’s Contract, Grants Leadership Bonuses
- Purple Innovation price target lowered to $5 from $6 at KeyBanc
