Comparing Sleep Number (NASDAQ:SNBR) and Dream Finders Homes (NYSE:DFH)

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

Profitability

This table compares Sleep Number and Dream Finders 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%
Dream Finders Homes	3.55%	10.38%	3.79%

Analyst Ratings

This is a summary of current ratings and price targets for Sleep Number and Dream Finders Homes, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Sleep Number	2	2	0	0	1.50
Dream Finders Homes	2	3	0	1	2.00

Sleep Number currently has a consensus target price of $3.50, suggesting a potential upside of 2,700.00%. Given Sleep Number’s higher possible upside, equities analysts clearly believe Sleep Number is more favorable than Dream Finders Homes.

Risk & Volatility

Sleep Number has a beta of 2.49, indicating that its share price is 149% more volatile than the S&P 500. Comparatively, Dream Finders Homes has a beta of 1.91, indicating that its share price is 91% more volatile than the S&P 500.

Insider & Institutional Ownership

85.7% of Sleep Number shares are owned by institutional investors. Comparatively, 95.6% of Dream Finders Homes shares are owned by institutional investors. 3.6% of Sleep Number shares are owned by insiders. Comparatively, 66.0% of Dream Finders Homes shares are owned by 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.

Earnings & Valuation

This table compares Sleep Number and Dream Finders Homes”s top-line revenue, earnings per share (EPS) 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
Dream Finders Homes	$4.32 billion	0.20	$217.20 million	$1.43	6.71

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

Summary

Dream Finders Homes beats Sleep Number on 12 of the 14 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 Dream Finders Homes

Dream Finders Homes, Inc. operates as a holding company for Dream Finders Holdings LLC that engages in homebuilding business in the United States. It designs, constructs, and sells single-family entry-level, and first-time and second time move-up homes in Charlotte, Raleigh, Jacksonville, Orlando, Denver, the Washington D.C. metropolitan area, Austin, Dallas, and Houston. The company also operates as a licensed home mortgage broker that underwrites, originates, and sells mortgages to Prime Lending; and provides insurance agency services, including closing, escrow, and title insurance, as well as mortgage banking solutions. It sells its homes through its sales representatives and independent real estate brokers. The company was founded in 2008 and is headquartered in Jacksonville, Florida.