Sleep Number Corporation

SNBR

Consumer CyclicalFurnishings, Fixtures & AppliancesNASDAQ

$3.03

Market Cap: $69.81M

Sleep Number Corporation (SNBR) Valuation Summary

Updated May 11, 2026 06:17

Model	Range	Fair Value	Upside
▸ Discounted Cash Flow
Revenue DCF 5Y	$8.74 – $410.64	$25.99	+757.8%
Revenue DCF 10Y	$4.34 – $327.12	$18.26	+502.6%

Valuation History

DCF Analysis

Sleep Number Corporation (SNBR) Revenue DCF (5Y)

REVENUE DCF FAIR VALUE

$18.26

Market Price

$3.03

Upside / Downside

+502.6%

Verdict

Undervalued

Using a Revenue DCF model with operating margin convergence from 0.3% to a target of 7.7% over 5 years, discounted at a WACC of 6.1%, Sleep Number Corporation (SNBR) has an intrinsic value of $18.26 per share (range: $4.34 – $327.12).

Key Assumptions

Current Operating Margin

0.3%

Target Operating Margin

7.7%

WACC

6.1%

Terminal Growth Rate

3.0%

Historical CapEx/Rev

2.4%

Target CapEx/Rev

6.0%

D&A/Revenue

3.5%

Tax Rate

21.5%

Operating margin fades linearly from the current level to the industry target over the 5-year projection. CapEx intensity fades from the historical average to a maintenance level (D&A × 1.5). Tax is only applied when operating income is positive (NOL shield).

Margin Convergence Projection

USD in millions. Mid-year discounting convention.

Year	Revenue	Growth	Op Margin	Op Income	NOPAT	D&A	CapEx	ΔNWC	FCFF	PV(FCFF)
2026	1,270	-10.0%	1.8%	23	18	45	(35)	55	-27	-26
2027	1,365	7.5%	3.3%	45	35	48	(42)	-1	43	39
2028	1,461	7.0%	4.8%	69	54	52	(50)	-1	57	49
2029	1,501	2.7%	6.2%	94	73	53	(57)	-1	70	57
2030	1,530	1.9%	7.7%	118	93	54	(64)	-0	84	64
2031	1,568	2.5%	7.7%	121	95	56	(71)	-1	80	58
2032	1,476	-5.9%	7.7%	114	89	52	(72)	1	68	46
2033	1,422	-3.7%	7.7%	110	86	50	(75)	1	61	39
2034	1,401	-1.4%	7.7%	108	85	50	(79)	0	55	33
2035	1,412	0.8%	7.7%	109	86	50	(85)	-0	51	29

Enterprise Value Bridge

Sum of PV(FCFF)389

Terminal Value (Gordon Growth at 3.0%)1,701

PV of Terminal Value970

Enterprise Value1,359

(–) Net Debt941

Equity Value418

(÷) Shares Outstanding23

Fair Value per Share$18.26

Sensitivity Analysis — WACC × Target Operating Margin

WACC \ Target Op. Margin	1.7%	4.7%	7.7%	10.7%	13.7%
4.1%	$-41	$18	$121	$224	$327
5.1%	$-41	$-8	$45	$99	$152
6.1%	$-41	$-18	$18	$54	$91
7.1%	$-41	$-23	$4	$32	$59
8.1%	$-41	$-26	$-4	$18	$39

Current price: $3.03. Green = undervalued, Red = overvalued.

Working Capital Assumption

Net Working Capital is modeled at -1.4% of revenue (historical average of receivables + inventory − payables). Changes in NWC (ΔNWC) are computed year-over-year and subtracted from free cash flow.

Sleep Number Corporation (SNBR) Revenue DCF (5Y)

REVENUE DCF FAIR VALUE

$25.99

Market Price

$3.03

Upside / Downside

+757.8%

Verdict

Undervalued

Key Assumptions

Current Operating Margin

0.3%

Target Operating Margin

7.7%

WACC

6.1%

Terminal Growth Rate

3.0%

Historical CapEx/Rev

2.4%

Target CapEx/Rev

6.0%

D&A/Revenue

3.5%

Tax Rate

21.5%

Margin Convergence Projection

USD in millions. Mid-year discounting convention.

Year	Revenue	Growth	Op Margin	Op Income	NOPAT	D&A	CapEx	ΔNWC	FCFF	PV(FCFF)
2026	1,270	-10.0%	1.8%	23	18	45	(39)	55	-32	-31
2027	1,365	7.5%	3.3%	45	35	48	(52)	-1	33	30
2028	1,461	7.0%	4.8%	69	54	52	(66)	-1	41	36
2029	1,501	2.7%	6.2%	94	73	53	(79)	-1	48	39
2030	1,530	1.9%	7.7%	118	93	54	(92)	-0	56	43

Enterprise Value Bridge

Sum of PV(FCFF)117

Terminal Value (Gordon Growth at 3.0%)1,852

PV of Terminal Value1,419

Enterprise Value1,536

(–) Net Debt941

Equity Value595

(÷) Shares Outstanding23

Fair Value per Share$25.99

Sensitivity Analysis — WACC × Target Operating Margin

WACC \ Target Op. Margin	1.7%	4.7%	7.7%	10.7%	13.7%
4.1%	$-44	$28	$155	$283	$411
5.1%	$-44	$-6	$60	$126	$191
6.1%	$-44	$-18	$26	$70	$114
7.1%	$-43	$-24	$9	$41	$74
8.1%	$-43	$-28	$-2	$24	$50

Current price: $3.03. Green = undervalued, Red = overvalued.

Working Capital Assumption

Net Working Capital is modeled at -1.4% of revenue (historical average of receivables + inventory − payables). Changes in NWC (ΔNWC) are computed year-over-year and subtracted from free cash flow.

Disclaimer: Sweet Value Lab provides estimated intrinsic values for informational purposes only. This is not financial advice. All models rely on assumptions that may not reflect future performance. Always do your own research before making investment decisions.

Model

Range

Fair Value

Upside

▸ Discounted Cash Flow

Revenue DCF 5Y

$8.74 – $410.64

$25.99

+757.8%

Revenue DCF 10Y

$4.34 – $327.12

$18.26

+502.6%

DCF Analysis

Sleep Number Corporation (SNBR) Revenue DCF (5Y)

REVENUE DCF FAIR VALUE

$18.26

Market Price

$3.03

Upside / Downside

+502.6%

Verdict

Undervalued

Key Assumptions

Current Operating Margin

0.3%

Target Operating Margin

7.7%

WACC

6.1%

Terminal Growth Rate

3.0%

Historical CapEx/Rev

2.4%

Target CapEx/Rev

6.0%

D&A/Revenue

3.5%

Tax Rate

21.5%

Margin Convergence Projection

USD in millions. Mid-year discounting convention.

Year	Revenue	Growth	Op Margin	Op Income	NOPAT	D&A	CapEx	ΔNWC	FCFF	PV(FCFF)
2026	1,270	-10.0%	1.8%	23	18	45	(35)	55	-27	-26
2027	1,365	7.5%	3.3%	45	35	48	(42)	-1	43	39
2028	1,461	7.0%	4.8%	69	54	52	(50)	-1	57	49
2029	1,501	2.7%	6.2%	94	73	53	(57)	-1	70	57
2030	1,530	1.9%	7.7%	118	93	54	(64)	-0	84	64
2031	1,568	2.5%	7.7%	121	95	56	(71)	-1	80	58
2032	1,476	-5.9%	7.7%	114	89	52	(72)	1	68	46
2033	1,422	-3.7%	7.7%	110	86	50	(75)	1	61	39
2034	1,401	-1.4%	7.7%	108	85	50	(79)	0	55	33
2035	1,412	0.8%	7.7%	109	86	50	(85)	-0	51	29

Enterprise Value Bridge

Sum of PV(FCFF)389

Terminal Value (Gordon Growth at 3.0%)1,701

PV of Terminal Value970

Enterprise Value1,359

(–) Net Debt941

Equity Value418

(÷) Shares Outstanding23

Fair Value per Share$18.26

Sensitivity Analysis — WACC × Target Operating Margin

WACC \ Target Op. Margin	1.7%	4.7%	7.7%	10.7%	13.7%
4.1%	$-41	$18	$121	$224	$327
5.1%	$-41	$-8	$45	$99	$152
6.1%	$-41	$-18	$18	$54	$91
7.1%	$-41	$-23	$4	$32	$59
8.1%	$-41	$-26	$-4	$18	$39

Current price: $3.03. Green = undervalued, Red = overvalued.

Working Capital Assumption

Net Working Capital is modeled at -1.4% of revenue (historical average of receivables + inventory − payables). Changes in NWC (ΔNWC) are computed year-over-year and subtracted from free cash flow.