Critical Contrast: Champion Homes (NYSE:SKY) and Sleep Number (NASDAQ:SNBR)

Sleep Number (NASDAQ:SNBR) and Champion Homes (NYSE:SKY) are both consumer discretionary companies, but which is the superior business? We will contrast the two companies based on the strength of their risk, earnings, profitability, analyst recommendations, institutional ownership, valuation and dividends.

Profitability

This table compares Sleep Number and Champion Homes’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Sleep Number	-12.98%	N/A	-16.48%
Champion Homes	7.16%	12.52%	9.29%

Analyst Ratings

This is a summary of recent ratings and price targets for Sleep Number and Champion Homes, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Sleep Number	2	2	0	0	1.50
Champion Homes	0	2	5	1	2.88

Sleep Number presently has a consensus target price of $3.50, suggesting a potential upside of 2,700.00%. Champion Homes has a consensus target price of $104.00, suggesting a potential upside of 22.05%. Given Sleep Number’s higher possible upside, analysts clearly believe Sleep Number is more favorable than Champion Homes.

Institutional and Insider Ownership

85.7% of Sleep Number shares are owned by institutional investors. 3.6% of Sleep Number shares are owned by company insiders. Comparatively, 0.6% of Champion Homes shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Risk and Volatility

Sleep Number has a beta of 2.49, meaning that its stock price is 149% more volatile than the S&P 500. Comparatively, Champion Homes has a beta of 1.01, meaning that its stock price is 1% more volatile than the S&P 500.

Valuation and Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Sleep Number	$1.34 billion	0.00	-$131.96 million	($7.56)	-0.02
Champion Homes	$2.66 billion	1.74	$206.90 million	$3.43	24.84

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

Summary

Champion Homes beats Sleep Number on 11 of the 15 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 Champion Homes

Skyline Champion Corporation produces and sells factory-built housing in North America. The company offers manufactured and modular homes, park models RVs, accessory dwelling units, and modular buildings for the multi-family and hospitality sectors. It builds homes under the Skyline Homes, Champion Home Builders, Genesis Homes, Athens Park Models, Dutch Housing, Atlantic Homes, Excel Homes, Homes of Merit, New Era, Redman Homes, ScotBilt Homes, Shore Park, Silvercrest, and Titan Homes brands in the United States; and Moduline and SRI Homes brand names in western Canada. The company also provides construction services to install and set-up factory-built homes; operates a factory-direct manufactured home retail business under the Titan Factory Direct and Champion Homes Center brand names with 31 sales centers in the United States; and engages in the transportation of manufactured homes and recreational vehicles. The company was founded in 2010 and is headquartered in Troy, Michigan.