3 Sleep Stocks That Have Significant Growth Potential

The global market for sleep aids and technologies is a massive, and growing one. In fact, BCC Research suggests that by 2025, the market will grow to be worth around $117 billion annually. 

So, it should come as no surprise that there are some compelling investment opportunities in the space. 

However, like any other industry, not all sleep aid and technology stocks are created equal, and if you want to tap into the growth in the industry, you’ll want to choose the right names to stand behind. 

Here are three stocks you may want to consider:

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ResMed (RMD)

ResMed is a global sleep powerhouse, focused on the development and sale of technologies to help those with COPD and sleep apnea enjoy a restful night’s sleep. Not only does the company offer technology like CPAP machines and other technology designed to help patients breathe better as they rest, it offers a software as a service, or SaaS platform for physicians who treat patients for sleep disorders. 

Diving deeper into the company, it becomes clear that this is becoming a growth story that has the potential to generate significant gains for investors. In fact, the company’s customer base is expanding quickly, leading to strong revenue growth, which in 2020, came in at a whopping 13%. 

That growth was helped along by incredible upward movement in the company’s SaaS arm, which saw 30% year over year growth, driving about $355 million of the company’s $3 billion in revenue. As the SaaS arm continues to grow, the opportunity becomes harder and harder to ignore as this is an incredibly high margin opportunity. 

Moving forward, further growth is expected. The company has become a leader in sleep-related technologies and diagnosis of sleep apnea and other conditions are on the rise. All in all, a perfect storm for substantial growth is brewing. 

NightFood (NGTF)

Next up is NightFood, a company that I recently became familiar with and have been impressed with since I heard about them. The company isn’t developing sleep-related medications or technologies. Instead, it’s focused on a major problem that hinders a restful night’s sleep… night time snacking. 

You see, human beings are hardwired to crave sweets, fats, and salts before bedtime, which was a necessity in the cave man days when calories weren’t so readily available. However, this writing works against us today. 

In fact, night time eating is one of the leading causes of sleep problems and obesity in the United States. 

NightFood is working hard to solve that problem. The company has formulated nine flavors of ice cream that not only taste good, but offer a night time snack that’s low in calories and high in components that help aid in a good night sleep. 

As a result, the company is gaining quite a bit of attention. Not only has it been named the official ice cream of the American Pregnancy Association, the company’s products have made its way onto the big box scene with more than 1,000 Walmart locations offering its products. 

At the same time, it’s in various health food stores, featured in as well as hotels like Fairfield Inn & Suites by Marriott, Residence Inn by Marriott, and Staybridge Suites by InterContinental Hotel Group. 

As consumers continue to pay more attention to what they consume, and NightFood products become more readily available to the masses, the company is expected to generate significant growth, making NGTF a stock that’s hard to ignore.  

Sleep Number Corporation (SNBR)

Finally, Sleep Number is a brand that most people reading this will have heard of before. The company has developed mattresses that adjust in firmness to meet the needs of those who use it. There are even some options that allow couples to adjust their respective sides of the bed to enjoy a better night’s sleep. 

As with the other companies on this list, Sleep Number is enjoying exceptional growth at the moment, with revenue coming in 12% higher in 2020 than in 2019. The company also greatly improved its operating margins, which climbed 500 basis points on a year over year basis. 

All told, Sleep Number is a household name that has shown its ability to capture an audience and improve sleep quality for its customers, leading to exceptional growth and making the stock one that’s hard to ignore. 

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Final Thoughts

With the sleep industry being such a massive one, there are huge opportunities for investors to tap into. The stocks above are some of my favorites in the space, representing significant growth opportunities for investors, while helping them sleep better at night! 

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CNA Finance is not a financial advisor or broker/dealer. This article is for entertainment and information purposes and not a solicitation to buy or sell securities. This article is the result of a monetary relationship between Nightfood and CNA Finance under which Nightfood pays CNA Finance a monthly retainer. The article above was written by Joshua Rodriguez and outlines his honest opinion of the company. Nightfood had no involvement in the development, or editing of this article. Trading in penny stocks can lead to potentially significant losses.