Select Comfort Corporation (NASDAQ:SCSS) is well positioned for the future because it is not just a mattress company--it is a technology company. The company already has integrated and continues to integrate smart technologies into its mattresses. Its line of Sleep Number mattresses adjusts to your body to ensure proper spinal alignment and can be adjusted for firmness and temperature. The company's SleepIQ technology helps you monitor your sleeping patterns and health through sensors that measure your breathing, heart rate, and movements while you sleep. The metrics the technology generates can be synced and viewed on your phone, iPad, or television.

Sleepiq

Source: Sleep Number Facebook

First Quarter Results
Select Comfort produced record first quarter revenues of $276 million, a 7% increase from the previous first quarter, and generated EPS of $0.31 compared to $0.41 in 2013's first quarter. The decrease in earnings was a result of increased operating expenses, largely from a 13.8% increase in marketing and sales expenses. The revenue number exceeded Wall Street's estimates for the 2014 first quarter, while the EPS came up a penny shy. The stock jumped over 3% after the company's announcement. Commenting on the quarter and Select Comfort's aggressive marketing strategy, President and CEO, Shelly Ibach said

We are pleased with our results, which were in line with internal expectations. We continue to make progress and are on track with our three important growth strategies: product innovation, marketing effectiveness and local market development. During the quarter, we introduced the most significant product innovations and marketing advancements in our company's history. Customer reaction has been strong and we remain cautiously optimistic in an ongoing challenging consumer environment.

Still Strong Financially
Select Comfort repurchased 0.6 million shares in the first quarter and continued its history of generating significant free cash flows. Comparable store sales increased 2% from 2013, while the sales generated by its new stores increased 7%. Furthermore, Select Comfort continues to carry no long-term debt and has no borrowings under its revolving credit facility. The company remains incredibly liquid with a current ratio above one, quick ratio close to one, and a negative cash conversion cycle for the last ten years. Moreover, Select Comfort has a long history of yielding above average returns on equity and capital, averaging over 30% the past four years.

Cheaply Priced
The company has realized significant insider buying in the last two months. In March, company management and directors acquired 171,145 shares and have purchased 56,680 shares in April. This shows confidence in the company and its future prospects. The company's insiders are also taking advantage of Select Comfort's low valuation in the market. The stock currently trades at a P/E multiple of 16.44, a forward P/E of 14, and a Price/Sales multiple of one.

Tempur Sealy International (NYSE:TPX)is Select Comfort's main publicly traded rival. Serta and Simmons Bedding Company are two other rivals, but both are privately-owned. The chart shows the valuations of Select Comfort and Tempur Sealy diverging on a P/E basis, suggesting that Tempur Sealy may be overvalued with such a high multiple of earnings and that Select Comfort may be undervalued.

SCSS PE Ratio (Annual) Chart

SCSS P/E Ratio (Annual) data by YCharts

A Bargain You Can Rest Well With
Select Comfort is currently trading at a discount and has a bright future. The company is embracing technology and is prepared financially to tackle any challenges ahead. Select Comfort's fortunes will continue to improve as the housing market heals and consumers purchase more of its mattresses for their homes. In addition, people will be moved to upgrade to the company's Sleep Number mattresses and benefit from its SleepIQ technology. Select Comfort will allow investors to get a good night's sleep and is a company with a long-term and technological strategy.

Andrew Sebastian has the following options: long January 2015 $20.00 calls on SCSS. The Motley Fool owns shares of Tempur Sealy International. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.