Financial Comparison: Sleep Number (NASDAQ:SNBR) versus Virco Manufacturing (NASDAQ:VIRC)

Sleep Number (NASDAQ:SNBR) and Virco Manufacturing (NASDAQ:VIRC) are both small-cap consumer discretionary companies, but which is the better business? We will contrast the two companies based on the strength of their profitability, institutional ownership, analyst recommendations, risk, dividends, earnings and valuation.

Analyst Ratings

This is a breakdown of recent ratings and target prices for Sleep Number and Virco Manufacturing, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Sleep Number	0	2	0	0	2.00
Virco Manufacturing	0	0	1	0	3.00

Sleep Number presently has a consensus price target of $8.3333, suggesting a potential downside of 9.42%. Virco Manufacturing has a consensus price target of $17.00, suggesting a potential upside of 110.40%. Given Virco Manufacturing’s stronger consensus rating and higher probable upside, analysts plainly believe Virco Manufacturing is more favorable than Sleep Number.

Volatility & Risk

Sleep Number has a beta of 1.71, indicating that its stock price is 71% more volatile than the S&P 500. Comparatively, Virco Manufacturing has a beta of 0.37, indicating that its stock price is 63% less volatile than the S&P 500.

Profitability

This table compares Sleep Number and Virco Manufacturing’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Sleep Number	-2.72%	N/A	-4.65%
Virco Manufacturing	7.99%	17.61%	9.63%

Earnings & Valuation

This table compares Sleep Number and Virco Manufacturing”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Sleep Number	$1.68 billion	0.12	-$20.33 million	($1.82)	-5.05
Virco Manufacturing	$253.26 million	0.50	$21.64 million	$1.26	6.41

Virco Manufacturing has lower revenue, but higher earnings than Sleep Number. Sleep Number is trading at a lower price-to-earnings ratio than Virco Manufacturing, indicating that it is currently the more affordable of the two stocks.

Insider & Institutional Ownership

85.7% of Sleep Number shares are held by institutional investors. Comparatively, 31.0% of Virco Manufacturing shares are held by institutional investors. 7.5% of Sleep Number shares are held by insiders. Comparatively, 18.1% of Virco Manufacturing shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Summary

Virco Manufacturing beats Sleep Number on 11 of the 14 factors compared between the two stocks.

About Sleep Number

Sleep Number Corporation, together with its subsidiaries, offers 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 provides smart adjustable bases under the FlextFit brand, and smart beds under the Climate 360 name. The company sells its products directly to consumers through retail, online, phone, chat, and other. The company was formerly known as Select Comfort Corporation and changed its name to Sleep Number Corporation in November 2017. Sleep Number Corporation was incorporated in 1987 and is headquartered in Minneapolis, Minnesota.

About Virco Manufacturing

Virco Mfg. Corporation engages in the design, production, and distribution of furniture in the United States and Canada. The company offers seating products, including 4-leg chairs, cantilever chairs, mobile task chairs and lab stools, tablet armchairs, steel-frame and floor rockers, series stools, hard plastic seating, folding and upholstered stack chairs, and plastic stack and upholstered ergonomic chairs. It also provides activity, butcher block, folding, office, technology, and mobile tables; desks and workstations, and instructor media stations and towers; chair desks and combo units, tablet arm and caster units, mobile workstations, student desks, and returns and credenzas; and computer furniture solutions. In addition, the company provides administrative office furniture, including desks, returns, bookcases, and other items, as well as steel storage cabinets, wardrobe tower cabinets, file credenzas, and mobile pedestals; laboratory furniture comprising steel-based science tables, table bases, lab stools, and wood-frame science tables; mobile furniture, such as mobile tables, mobile cabinets, and mobile chairs for school settings and offices; and handling and storage equipment, and stackable storage trucks. It serves public and private educational institutions, charter schools, convention centers and arenas, hospitality providers, government facilities, and places of worship through its sales and support teams, and dealers' network. Virco Mfg. Corporation was incorporated in 1950 and is headquartered in Torrance, California.