Casper Sleep (CSPR - Get Rating) has had a nice run across the prior three months, jumping from $6 to more than $9. This sleep products company certainly isn’t a high-flying tech superstar, yet is it worthy of your attention?

The company sells what every human being needs: a bed. CSPR also sells duvets, sheets, pillows, furniture, and additional accessories. In fact, CSPR even sells sleep technology and related services on its e-commerce platform.

Some investors don’t consider stocks that haven’t been around for over a decade, but they may be missing out. Most people don’t even know about CSPR, which is why I am covering the stock below. 

Why Investors are Interested in CSPR

Though CSPR has some brick-and-mortar locations, it also sells mattresses and related products on its website’s easy-to-use e-commerce platform. CSPR provides no-contact, no-cost delivery, ensuring customers don’t have to venture out of their homes and risk exposure to the coronavirus to purchase a CSPR mattress or another sleep-related item.

Though CSPR is trading a couple of dollars below its IPO price of $12, there is reason for hope. CSPR shut down its European operations last quarter, causing revenue to decline 3%, yet this was a strategic move to set the stage for CSPR to reinvest in expansion opportunities.

Now that CSPR executives appear to have the company’s supply chain issues figured out, the stage is set for the company to meet demand. Keep in mind, CSPR’s online traffic reached an all-time high in the third quarter of last year and will likely continue to hold steady or move higher as word gradually spreads about the merits of the company’s mattresses.

As long as CSPR’s brass can reduce the percentage of revenue spent on sales and marketing, the stock could hold steady. However, it is somewhat concerning that CSPR is currently spending around one-third of its revenue on sales and marketing.

What are the Analysts Saying About CSPR?

Analysts have mixed opinions on CSPR. The analysts’ high target price for the stock is $10.50. Analysts’ low target price for CSPR is $5.50. The analysts’ average target price for CSPR is $8.30. It is particularly interesting to note the number of analysts covering CSPR is greater than 97% of all small-cap stocks.

CSPR POWR Ratings

CSPR has an overall rating of D or a Sell in our POWR Ratings system. CSPR has C grades in the Momentum, Value, and Growth components of the POWR Ratings. If you are curious about how CSPR grades out in the Quality, Sentiment, and Stability components of the POWR Ratings, you can find out more by clicking here.

Of the 64 publicly traded companies in the Home Improvement & Goods space, CSPR is ranked 62nd. However, this industry has an overall A grade in the POWR Ratings. Investors can find top stocks in the Home Improvement & Goods industry by clicking here.

Buy, Sell or Hold?

While this could be a stock with potential at some point, its D rating is a Strong Sell sign. The current economic situation has meant fewer people are splurging for a new bed or bedding accessories. This may change once the economy opens back up again and more people have jobs, but at this time, it’s best to avoid this stock.

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CSPR shares fell $0.05 (-0.55%) in after-hours trading Wednesday. Year-to-date, CSPR has gained 48.78%, versus a 4.78% rise in the benchmark S&P 500 index during the same period.

About the Author: Patrick Ryan

Patrick Ryan has more than a dozen years of investing experience with a focus on information technology, consumer and entertainment sectors. In addition to working for StockNews, Patrick has also written for Wealth Authority and Fallon Wealth Management. More...

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