A look into Purple Innovation Inc. (PRPL)’s deeper side

Purple Innovation Inc. (NASDAQ: PRPL) stock fell -7.80% on Friday to $5.08 against a previous-day closing price of $5.51. With 0.54 million shares changed hands, the volume of the stock remained lighter than its average volume of 0.67 million shares. During the session, the Furnishings Fixtures & Appliances company that operates in wider Consumer Cyclical sector, reached to the highest price of $5.56 whereas the lowest price it dropped to was $5.02. The 52-week range on PRPL shows that it touched its highest point at $9.54 and its lowest point at $2.65 during that stretch. It currently has a 1-year price target of $5.78. Beta for the stock currently stands at 1.55.

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Price Performance and Earnings:

Stock performance is one of the indicators that investors use to determine whether they will profit from a stock. The price performance of PRPL was down-trending over the past week, with a drop of -13.90%, but this was up by 7.40% over a month. Three-month performance surged to 38.04% while six-month performance rose 30.59%. The stock lost -45.84% in the past year, while it has gained 6.05% so far this year. A look at the trailing 12-month EPS for PRPL yields -0.60 with Next year EPS estimates of -0.05. For the next quarter, that number is -0.03. This implies an EPS growth rate of 101.00% for this year and 83.90% for next year. EPS is expected to grow by 14.60% annually over the next five years; however, over the past five years, the company experienced an annual growth rate of 20.10%.

Float and Shares Shorts:

At present, 91.83 million PRPL shares are outstanding with a float of 90.16 million shares on hand for trading. On Oct 13, 2022, short shares totaled 6.84 million, which was 7.54% higher than short shares on Sep 14, 2022. In addition to Mr. Robert T. DeMartini as the firm’s CEO & Director, Mr. Bennett L. Nussbaum serves as its Interim CFO & Treasurer.

Institutional Ownership:

Through their ownership of 114.93% of PRPL’s outstanding shares, institutional investors have majority control over the company. Other institutions hold 71.83% of PRPL, in contrast to 59.03% held by mutual funds. Shares owned by individuals account for 20.48%. As the largest shareholder in PRPL with 44.71% of the stake, Coliseum Capital Management LLC holds 40,854,130 shares worth 40,854,130. A second-largest stockholder of PRPL, Fidelity Management & Research Co, holds 10,936,516 shares, controlling over 11.97% of the firm’s shares. No Street GP LP is the third largest shareholder in PRPL, holding 4,700,000 shares or 5.14% stake. With a 3.69% stake in PRPL, the Fidelity Growth Company Fund is the largest stakeholder. A total of 3,370,483 shares are owned by the mutual fund manager. The Fidelity Series Growth Company Fu, which owns about 1.62% of PRPL stock, is the second-largest Mutual Fund holder. It holds 1,480,187 shares valued at 7.09 million. Vanguard Total Stock Market Index holds 1.62% of the stake in PRPL, owning 1,478,691 shares worth 7.08 million.

Analysts Ratings:

Reading analyst opinions is an effective way to decide where to invest, and there are several opinions available for PRPL since 9 analysts follow the stock currently. There are 4 analysts who recommend BUY ratings, while 0 suggest SELL ratings. Of the remaining analysts, 4 believe that the stock is worth HOLDING, 0 give it an OVERWEIGHT rating, and 1 thinks that it’s UNDERWEIGHT. In the same way, a target price assigned to a stock can also reveal much about its potential. With PRPL analysts setting a high price target of $8.00 and a low target of $4.00, the average target price over the next 12 months is $5.89. Based on these targets, PRPL could surge 57.48% to reach the target high and fall by -21.26% to reach the target low. Reaching the average price target will result in a growth of 15.94% from current levels.

EPS: Estimates vs Actual

It is also common to use earnings estimates to evaluate a firm’s growth potential and to determine trading strategy. PRPL will report FY 2022 earnings on 02/28/2024. Analysts have provided yearly estimates in a range of -$0.21 being high and -$0.33 being low. For PRPL, this leads to a yearly average estimate of -$0.30. The earnings surprise of a firm occurs when the actual results change from the consensus earnings estimate. Purple Innovation Inc. surprised analysts by $0.10 when it reported $0.03 EPS against a consensus estimate of -$0.07. The surprise factor in the prior quarter was -$0.04. The average estimate for the next quarter is thus -$0.03.

Summary of Insider Activity:

Insiders traded PRPL stock several times over the past three months with 1 Buys and 0 Sells. In these transactions, 2,177 shares were bought while 0 shares were sold. The number of buy transactions has increased to 46 while that of sell transactions has risen to 8 over the past year. The total number of shares bought during that period was 24,297,081 while 2,065 shares were sold.

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