What Can We Learn From Purple Innovation Inc. (PRPL)’s Valuation Ratios?

BEPC Stock
BEPC Stock

Purple Innovation Inc. (NASDAQ:PRPL) finished Thursday with a subtraction of -$0.07 to close at $3.84, a downside of -1.92 percent. An average of 16,737,645 shares of common stock have been traded in the last five days. There was a gain of $1.06 in the past week, and it reached a new high 2 times over the past 12 months. The last 20 days have seen an average of 5,226,626 shares traded, while the 50-day average volume stands at 2,841,046.

PRPL stock has increased by 28.62% in the last month. The company shares reached their 1-month lowest point of $2.65 on 09/06/22. With the stock rallying to its 52-week high on 01/04/22, shares of the company touched a low of $2.65 and a high of $23.13 in 52 weeks. It has reached a new high 2 times so far this year and lost -70.54% or -$9.43 in price. In spite of this, the price is down -83.42% from the 52-week high.

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Valuation Metrics

Purple Innovation Inc. (PRPL) stock’s beta is 1.91. Other valuation ratios to consider include the trailing price-to-sales (P/S) ratio at 0.52, the price-to-book (PB) ratio at 1.48.

Financial Health

The quick ratio of Purple Innovation Inc. for the three months ended June 29 was 0.90, and the current ratio was 1.90, indicating that the company is not able to meet its debt obligations. Further, the company has a long term debt to equity ratio of 0.17 and a total debt to equity ratio of 0.18 for the quarter ending June 29. Its gross profit as reported stood at $294.97 million compared to revenue of $726.23 million.

For investors, determining the potential profitability of the investment also depends on the performance of the company’s management. In the past 12 months, Purple Innovation Inc.’s return on assets was -6.60%.

Earnings Surprise

In the quarter under review, the net income was up than the previous quarter. The company posted a net income of -$8.34 million in the quarter, while revenues of -$13.5 million were grew 130.94%. The analyst consensus anticipated Purple Innovation Inc.’s latest quarter earnings to come in at -$0.07 per share, but it turned out to be -$0.11, a -57.10% surprise. For the quarter, EBITDA amounted to -$8.35 million. Shareholders own equity worth $83.21 million.

Technical Picture

From a technical analysis perspective, let’s take a brief look at Purple Innovation Inc. (PRPL) price momentum. RSI 9-day as of the close on 22 September was 61.26%, suggesting the stock is Neutral, with historical volatility in this time frame at 190.51%.

As of today, PRPL’s price is $3.93 +37.81% or $1.06 from its 5-day moving average. PRPL is currently trading +24.03% higher than its 20-day SMA and -8.67% lower than its 100-day SMA. However, the stock’s current price level is +11.13% above the SMA50 and -62.34% below the SMA200.

The stochastic %K and %D were 75.95% and 80.85%, respectively, and the average true range (ATR) was 0.35. With the 14-day stochastic at 70.09% and the average true range at 0.34, the RSI (14) stands at 57.85%. The stock has reached 0.48 on the 9-day MACD Oscillator while the 14-day reading was at 0.64.

Analyst Ratings

UBS reiterated its a Neutral rating on Purple Innovation Inc. (NASDAQ: PRPL), but raised their price target to $10, indicating a potential price increase of 61.6% for the stock. The consensus rating for Purple Innovation Inc. (PRPL) among analysts is Overweight. According to current brokerage recommendations, 0 brokerage firms advise that investors sell PRPL, while 5 suggest investors hold. There are 0 analysts who rate the stock as underweight. The stock is rated overweight by 0 analysts, while 3 others rate it as a “buy”.

What is PRPL’s price target for the next 12 months?

Analysts predict a range of price targets between $4.00 and $8.00, with a median target of $4.68. Taking a look at these predictions, the average price target given by analysts for Purple Innovation Inc. (PRPL) stock is $5.12.


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