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How Purple Innovation (PRPL) Looks Just Ahead of Q3 Earnings

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Purple Innovation, Inc. (PRPL - Free Report) is likely to register top- and bottom-line growth when it reports third-quarter 2020 numbers on Nov 11, before the opening bell. The Zacks Consensus Estimate for revenues is pegged at $176.5 million, which indicates an increase of 50.3% from the year-ago quarter’s reported figure. The company had witnessed top-line growth of 60.3% in the last reported quarter.

The Zacks Consensus Estimate for quarterly earnings went up 6 cents in the past 30 days and is currently pegged at 25 cents per share. The figure suggests a rise of 31.6% from the prior-year quarter’s level. Notably, this Lehi, UT-based company’s bottom line surpassed the Zacks Consensus Estimate in each of the trailing four quarters by a significant margin.

Factors to Note

Purple Innovation’s top line during the third quarter is likely to have benefitted from consumers enhanced spending on products that aid comfort living. With increased stay-at home and work-from-home directives amid the ongoing coronavirus pandemic, there is growing inclination toward making homes a comfortable space. As a result, the company is witnessing higher consumer demand for products like mattresses, seat cushions, pillows and sheets. The company is seeing surge in demand for products in the bedroom and home office categories. Favorable demand conditions for such items are likely to have continued in the third quarter as well.

We note that Purple Innovation is gaining from growth in its direct-to-consumer (DTC) channel, backed by consumers’ enhanced inclination toward online services. In order to effectively capture accelerated growth in e-commerce, the company has been on track with ramping up fulfillment centre capabilities as well as production. Such efforts are likely to have favored the DTC channel’s growth during the quarter under review.

Apart from these, the company is on track with strategic growth efforts such as product innovation, enhancing supply-chain effectiveness and brand development. It is also striving to keep costs under control by eliminating non-essential spending, including travel.

PURPLE INNOVATION, INC. Price, Consensus and EPS Surprise PURPLE INNOVATION, INC. Price, Consensus and EPS Surprise

PURPLE INNOVATION, INC. price-consensus-eps-surprise-chart | PURPLE INNOVATION, INC. Quote

What the Zacks Model Unveils

Our proven model predicts an earnings beat for Purple Innovation this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Purple Innovation carries a Zacks Rank #2 and an Earnings ESP of +5.82%.

Stocks Poised to Beat Earnings Estimates

Here are some companies you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat.

Lowes Companies, Inc. (LOW - Free Report) currently has an Earnings ESP of +2.90% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Dollar General Corporation (DG - Free Report) currently has an Earnings ESP of +8.17% and a Zacks Rank #2.

Best Buy Co., Inc. (BBY - Free Report) has an Earnings ESP of +14.92% and a Zacks Rank #2, at present.

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