Mattress Firm IPO: How to buy MFRM stock & is it worth buying?

Highlights:

• Mattress Firm claims to be the largest omnichannel specialty retailer in the United States.
• Last year, Mattress Firm had confidentially filed draft documents with authorities, and in 2022, the American retailer could go public.
• Mattress Firm operates through 2,353 retail stores and caters to customers' needs through e-commerce platforms like MattressFirm.com.

Mattress Firm Group Inc. plans to go public in the US stock markets and filed an initial prospectus with regulatory authorities.

Last year, Mattress Firm had confidentially filed draft documents with authorities, and in 2022, the American retailer could go public and raise US$ 100 million in gross proceeds.

However, this amount could change after it declares the price range and the number of shares to be sold through the initial public offering (IPO).

If the IPO happens, Mattress Firm will debut on New York Stock Exchange and trade under the stock symbol MFRM.

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The documents filed with the Securities and Exchange Commission (SEC) suggest that the IPO's underwriting would be carried forward by Barclays, UBS Investment Bank, and Goldman Sachs & Co. LLC, among others.

Mattress Firm IPO: Is MFRM stock a buy?

According to the preliminary prospectus, Mattress Firm claims to be the largest omnichannel specialty retailer in the United States.

The company operates through 2,353 retail stores and caters to customers' needs through e-commerce platforms like MattressFirm.com and Sleep.com.

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Mattress Firm claims to have outperformed the US retail mattress and foundations industry. In 2020, the company grew its revenue by 13.1 per cent compared to the industry's growth of 6.9 per cent.

From fiscal 2019 to 2021, Mattress Firm's net revenue and adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) grew at a compound annual growth rate (CAGR) of 21.8 and 108.9 per cent, respectively.

The Texas-based company claims that its growth trajectory was strong before the COVID-19 pandemic and remained strong after the pandemic as it shifted its focus on digital offerings.

Mattress Firm IPO will be subjected to approval from regulatory authorities as it will have to file an amended prospectus declaring the price range and quantity of shares. 

If the company gets approval for an IPO, retail investors will be able to buy MFRM stock when the company starts trading on NYSE. 

Bottom line

In 2020, Furniture Today and International Sleep Products Association (ISPA) valued the US retail mattress and foundations industry at around US$ 18 billion.

Mattress Firm claimed to be a market leader and said in the documents that it had a market share of 20 per cent at the end of 2020.

If the retail mattress and foundation industry grow in future, Mattress Firm could benefit from it.

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