Casper CEO says he thinks the mattress company's stock is cheap after nearly 20% drop

Brian Sozzi
·Editor-at-Large

Casper co-founder and CEO Philip Krim says he is staying bullish on the stock after a big post-earnings drop on Monday.

“I certainly think the stock is inexpensive. I was a buyer of the stock in the first window [after the February IPO] that we were allowed to buy. I think the business has performed well this year. I think 2021 is shaping up to be a banner year for us,” Krim told Yahoo Finance Live. “We think now is a great time to buy the stock.”

At least for right now, investors are taking the other side of the trade on Casper.

Shares of the bedding maker fell nearly 20% Monday following a disappointing third quarter earnings report. Casper pinned misses on the top and bottom lines to supply chains issues brought on the by the COVID-19 pandemic, such as strong demand for mattresses leading to shortages in foam chemicals and innersprings. In turn, Casper was unable to meet the demand from consumers on its website and had to turn away orders from key retail partners.

Here’s how Casper performed relative to Wall Street estimates compiled by Bloomberg for the quarter:

  • Net Sales: $123.5 million versus estimates for $146 million

  • Diluted Loss Per Share: 40 cents versus estimates for 33 cent loss

  • 4Q Sales Guidance: $132 million to $142 million versus estimates for $143 million

Krim said sales have rebounded so far in the fourth quarter as the company has moved beyond its supply chain mishaps by adding more raw materials suppliers to its platform. He reiterated his goal of being EBITDA profitable by mid-2021 in the interview.

NEW YORK CITY, USA — AUGUST 02: Philip Krim, Co-Founder and CEO of Casper, poses for a portrait on August 2, 2017 in New York City. Casper is a popular direct-to-consumer mattress company. (Photo by Benjamin Lowy/Getty Images)
NEW YORK CITY, USA — AUGUST 02: Philip Krim, Co-Founder and CEO of Casper, poses for a portrait on August 2, 2017 in New York City. Casper is a popular direct-to-consumer mattress company. (Photo by Benjamin Lowy/Getty Images)

All in all, Casper has some convincing to do on Wall Street headed into 2021. The stock opened for trading on its February 6 IPO day at $14.50 a share and closed the session around $13.50 — or a valuation of about $500 million. Prior to the IPO, Casper had been valued at $1.1 billion as a private company.

The company’s current market cap is roughly $243 million as investors wait to see if Casper could deliver on its 2021 profit goal.

Brian Sozzi is an editor-at-large and anchor at Yahoo Finance. Follow Sozzi on Twitter @BrianSozzi and on LinkedIn.

What’s hot from Sozzi:

Watch Yahoo Finance’s live programming on Verizon FIOS channel 604, Apple TV, Amazon Fire TV, Roku, Samsung TV, Pluto TV, and YouTube. Online catch Yahoo Finance on Twitter, Facebook, Instagram, Flipboard, SmartNews, LinkedIn, and reddit.