What happened

Shares of Purple Innovation (NASDAQ:PRPL), maker of mattresses and other sleep products, went up on Wednesday after attracting some prominent analyst attention. After market close on Tuesday the company was cast in a positive light on CNBC's Fast Money show. This came after an Oppenheimer analyst maintained their buy rating on the stock earlier in the day.

As of 3:30 p.m. EDT, Purple Innovation stock was up 10% and had climbed a remarkable 216% so far in 2020.

PRPL Chart

PRPL data by YCharts

So what

Oppenheimer analyst Brian Nagel believes Purple Innovation stock has significant upside. Yesterday, Nagel maintained the stock's buy rating and gave the stock a price target of $37 per share. For perspective, that's almost 50% upside from where the stock traded at the time. Nevertheless, shares were down by the end of the day yesterday.

However, after the closing bell rang, Purple Innovation was discussed on Fast Money as a "stealth housing play." An analyst on the show said the company could reach $1 billion in revenue within two years. Given its spectacular growth, the stock was discussed as potentially reaching $55 per share within the next 12 to 18 months and possibly reaching $100 per share in the next five years. 

A chalkboard chart shows dollar signs getting bigger over time.

Image source: Getty Images.

Now what

In investing, it's important to form your own convictions about where a stock is headed. Purple Innovation stock soared after hours as it was discussed on TV, which tells me people were buying without doing their own due diligence.

Even if Purple Innovation is headed for multi-bagger returns, I can all but guarantee it won't be a smooth ride up -- investing hardly ever is. When top performers pull back in the short term, it's a test of an investor's conviction. But without doing your own research, you don't have conviction, and you might sell way too early. 

That's just one example of why due diligence is important. Purple Innovation stock may indeed be headed higher, but be careful to not blindly follow others into an investment. If you don't know where to get started, start by learning how to research stocks.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.