Select Comfort Corp

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SCSS : NASDAQ : Consumer Goods
$23.12 -2.00 | -8.00%
Today's Range: 22.93 - 23.81
Avg. Daily Volume: 546,000
09/28/16 - 1:57 PM ET

Financial Analysis

SELECT COMFORT CORP's gross profit margin for the second quarter of its fiscal year 2016 is essentially unchanged when compared to the same period a year ago. Even though sales increased, the net income has decreased, representing a decrease to the bottom line. SELECT COMFORT CORP has very weak liquidity. Currently, the Quick Ratio is 0.13 which clearly shows a lack of ability to cover short-term cash needs. The liquidity decreased from the same period a year ago, despite already having weak liquidity to begin with. This would indicate deteriorating cash flow.

At the same time, stockholders' equity ("net worth") has significantly decreased by 31.94% from the same quarter last year. The key liquidity measurements indicate that the company is in a position in which financial difficulties could develop in the near future.

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Income Statement Q2 FY16 Q2 FY15
Net Sales ($mil)276.88275.29
EBITDA ($mil)16.529.75
EBIT ($mil)2.418.63
Net Income ($mil)1.4211.04

Balance Sheet Q2 FY16 Q2 FY15
Cash & Equiv. ($mil)2.488.45
Total Assets ($mil)454.74475.57
Total Debt ($mil)16.00.0
Equity ($mil)173.81255.39

Profitability Q2 FY16 Q2 FY15
Gross Profit Margin66.9565.99
EBITDA Margin5.9610.8
Operating Margin0.876.77
Sales Turnover2.682.67
Return on Assets5.5117.31
Return on Equity14.4232.23
Debt Q2 FY16 Q2 FY15
Current Ratio0.721.21
Interest Expense0.250.01
Interest Coverage9.551862.9

Share Data Q2 FY16 Q2 FY15
Shares outstanding (mil)45.9351.41
Div / share0.00.0
Book value / share3.784.97
Institutional Own % n/a n/a
Avg Daily Volume543993.0740086.0


HOLD. SELECT COMFORT CORP's P/E ratio indicates a significant premium compared to an average of 21.96 for the Specialty Retail industry and a significant premium compared to the S&P 500 average of 25.19. To use another comparison, its price-to-book ratio of 6.82 indicates a significant premium versus the S&P 500 average of 2.82 and a significant discount versus the industry average of 12.35. The price-to-sales ratio is well below both the S&P 500 average and the industry average, indicating a discount.

1 2 3 4 5
premium   discount
  Price/Cash Flow
1 2 3 4 5
premium   discount
SCSS 51.62 Peers 21.96   SCSS 11.06 Peers 14.09

Premium. A higher P/E ratio than its peers can signify a more expensive stock or higher growth expectations.

SCSS is trading at a significant premium to its peers.


Discount. The P/CF ratio, a stock’s price divided by the company's cash flow from operations, is useful for comparing companies with different capital requirements or financing structures.

SCSS is trading at a discount to its peers.

1 2 3 4 5
premium   discount
  Price to
1 2 3 4 5
premium   discount
SCSS 15.18 Peers 19.56   SCSS 1.79 Peers 1.91

Average. An average price-to-projected earnings ratio can signify an industry neutral stock price and average future growth expectations.

SCSS is trading at a valuation on par with its peers.


Average. The PEG ratio is the stock’s P/E divided by the consensus estimate of long-term earnings growth. Faster growth can justify higher price multiples.

SCSS trades at a valuation on par to its peers.

1 2 3 4 5
premium   discount
  Earnings Growth
1 2 3 4 5
lower   higher
SCSS 6.82 Peers 12.35   SCSS -67.54 Peers 0.78

Discount. A lower price-to-book ratio makes a stock more attractive to investors seeking stocks with lower market values per dollar of equity on the balance sheet.

SCSS is trading at a significant discount to its peers.


Lower. Elevated earnings growth rates can lead to capital appreciation and justify higher price-to-earnings ratios.

However, SCSS is expected to significantly trail its peers on the basis of its earnings growth rate.

1 2 3 4 5
premium   discount
  Sales Growth
1 2 3 4 5
premium   discount
SCSS 0.97 Peers 1.48   SCSS -4.11 Peers 7.28

Discount. In the absence of P/E and P/B multiples, the price-to-sales ratio can display the value investors are placing on each dollar of sales.

SCSS is trading at a significant discount to its industry on this measurement.


Lower. A sales growth rate that trails the industry implies that a company is losing market share.

SCSS significantly trails its peers on the basis of sales growth



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