- UBS stays constructive on Purple Innovation (PRPL -0.7%) amid some growing pains for the retailer and near-term uncertainty.
- The firm thinks Purple Innovation's long-term targets of $2.0B to $2.5B in revenue and 14% to 15% EBITDA margins look reasonable and fully achievable.
- UBS' breakdown: "It's clear that producing these novel gel beds is more complex than a standardized foam bed. This could lead to some volatility in performance (its goals are unlikely to be achieved in a straight line). That said, the stock is trading at ~10x the EPS implied by the low end of its guidance. At these levels, we see more meaningfully more upside than downside."
- UBS keeps a price target of $35 on PRPL to rep more than 30% upside potential for shares. The average Wall Street price target on PRPL is even higher at $39.70.