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Somnigroup International
(NYSE:SGI)
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Rating:59Neutral
Price Target:
$68.00
â–¼(-4.97% Downside)
Action:Reiterated
Date:08/07/26
The score is primarily supported by solid profitability and strong free-cash-flow generation alongside improving leverage, plus a generally positive earnings-call outlook with reaffirmed guidance and synergy progress. These strengths are offset by weak technicals (stock trading below major moving averages with negative MACD) and valuation that looks somewhat expensive (P/E 26.2, sub-1% yield), while the reported sharp TTM revenue decline remains a key fundamental risk.
Positive Factors
Free Cash Flow Generation
Sustained high free cash flow provides durable funding for dividends, buybacks, debt paydown and M&A. With FCF exceeding net income and strong absolute cash generation, the company has flexibility to invest in growth, support synergies and reduce leverage over the next several quarters.
Negative Factors
Top-line Volatility
A dramatic reported TTM revenue contraction signals elevated demand or reporting volatility that undermines confidence in sustainable growth. Persistent top-line weakness forces reliance on cost synergies and cash deployment rather than organic expansion, making recovery timing uncertain.
Read all positive and negative factors
Positive Factors
Negative Factors
Free Cash Flow Generation
Sustained high free cash flow provides durable funding for dividends, buybacks, debt paydown and M&A. With FCF exceeding net income and strong absolute cash generation, the company has flexibility to invest in growth, support synergies and reduce leverage over the next several quarters.
Read all positive factors
Somnigroup International (SGI) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$13.90B
Dividend Yield0.98%
Average Volume (3M)2.46M
Price to Earnings (P/E)25.5
Beta (1Y)1.01
Revenue Growth27.07%
EPS Growth73.19%
CountryUS
Employees19,000
SectorConsumer Cyclical
Sector Strength84
IndustryFurnishings, Fixtures & Appliances
Share Statistics
EPS (TTM)2.55
Shares Outstanding210,365,500
10 Day Avg. Volume1,711,018
30 Day Avg. Volume2,462,002
Financial Highlights & Ratios
PEG Ratio-3.03
Price to Book (P/B)5.92
Price to Sales (P/S)2.46
P/FCF Ratio29.05
Enterprise Value/Market Cap<0.01
Enterprise Value/Revenue<0.01
Enterprise Value/Gross Profit<0.01
Enterprise Value/Ebitda<0.01
Forecast
1Y Price Target
$93.67Price Target Upside30.89% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering9
EPS Forecast (FY)3.06
Revenue Forecast (FY)$7.64B
Somnigroup International Business Overview & Revenue Model
Company Description
Somnigroup International Inc., operating as Somni, leads the field in advanced sleep technology and holistic wellness solutions. They engineer groundbreaking products specifically designed to elevate sleep quality. Their approach seamlessly integr...
How the Company Makes Money
null...
Somnigroup International Earnings Call Summary
Earnings Call Date:May 07, 2026
(Q1-2026)
| % Change Since: |
Next Earnings Date:Oct 29, 2026
Earnings Call Sentiment Positive
Overall the call communicated a predominantly positive operational and financial performance: strong revenue growth (+12%), robust margin expansion and cash generation, meaningful synergy realization, international outperformance, and a clear plan to offset commodity inflation via pricing. Notable near-term headwinds include weaker industry demand (mid-single-digit decline), Mattress Firm margin pressure, a Q2 commodity-related profit headwind (~$10 million) and elevated leverage (3.1x) that management expects to remediate. The strategic combination with Leggett & Platt and reaffirmed 2026 guidance (EPS $3.00–$3.40) further support a constructive outlook despite cyclical and timing risks.Positive Updates
Revenue Growth
Net sales rose 12% year-over-year to $1.8 billion in Q1 2026, reflecting solid topline growth across segments.
Negative Updates
Industry Demand Weakness
Management believes global bedding demand declined mid-single digits in Q1 (worse than prior expectation of flat to slightly positive), reflecting macro/geopolitical headwinds and winter weather disruptions.
Read all updates
Q1-2026 Updates
Positive
Negative
Revenue Growth
Net sales rose 12% year-over-year to $1.8 billion in Q1 2026, reflecting solid topline growth across segments.
Read all positive updates
Company Guidance
Guidance for 2026 calls for adjusted EPS of $3.00–$3.40 on roughly $7.8 billion of consolidated sales (midpoint), with adjusted EBITDA targeted at about $1.45 billion; reported gross margin is expected to be slightly above 45% with nearly 100 basis points of net margin expansion from synergies and operating leverage. Management assumes the global bedding industry will be flat to slightly down, with Tempur Sealy North America like‑for‑like sales growing mid‑single digits, international like‑for‑like growth mid‑single digits, and Mattress Firm like‑for‑like sales growing low‑single digits; intercompany eliminations (between Mattress Firm and Tempur Sealy) are expected to represent ~23% of global Tempur Sealy sales. The plan anticipates the pricing actions will be dollar‑neutral for the year (a ~$50 million uplift to back‑half 2026 like‑for‑like sales and ~ $100 million annualized), a Q2 commodity timing headwind of about $10 million to Tempur Sealy profits, Q1 synergy run‑rate of $15 million (sales) and $50 million (cost), ~ $700 million of advertising, CapEx of ~ $225 million in 2026 (including ~$75 million for Mattress Firm refreshes) with normalized CapEx ~ $200 million thereafter, interest expense of about $230 million, a 25% tax rate, ~213 million diluted shares, and a commitment to deploy at least 50% of 2026 free cash flow to dividends and buybacks while returning leverage (Q1 at 3.1x) to the 2–3x adjusted EBITDA target.Somnigroup International Financial Statement Overview
Summary
Income Statement
64
Positive
Balance Sheet
58
Neutral
Cash Flow
72
Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 7.62B | 7.48B | 4.93B | 4.93B | 4.92B | 4.93B |
| Gross Profit | 3.40B | 3.32B | 2.18B | 2.13B | 2.05B | 2.16B |
| EBITDA | 1.25B | 1.04B | 804.20M | 739.30M | 807.30M | 1.00B |
| Net Income | 533.30M | 384.10M | 384.30M | 368.10M | 455.70M | 624.50M |
Balance Sheet | ||||||
| Total Assets | 11.61B | 11.61B | 5.98B | 4.55B | 4.36B | 4.32B |
| Cash, Cash Equivalents and Short-Term Investments | 112.00M | 134.90M | 117.40M | 74.90M | 69.40M | 300.70M |
| Total Debt | 6.41B | 8.26B | 4.47B | 3.27B | 3.37B | 2.86B |
| Total Liabilities | 8.37B | 8.50B | 5.41B | 4.22B | 4.37B | 4.03B |
| Stockholders Equity | 3.23B | 3.11B | 559.00M | 323.40M | -22.10M | 285.80M |
Cash Flow | ||||||
| Free Cash Flow | 769.00M | 633.20M | 569.20M | 384.90M | 72.30M | 599.80M |
| Operating Cash Flow | 990.40M | 800.10M | 666.50M | 570.30M | 378.80M | 723.10M |
| Investing Cash Flow | -261.30M | -3.02B | -96.70M | -187.80M | -315.60M | -555.70M |
| Financing Cash Flow | -707.30M | 616.90M | 1.08B | -384.30M | -279.10M | 76.50M |
Somnigroup International Technical Analysis
Negative
71.56
Price Trends
71.49
Negative
72.19
Negative
80.07
Negative
Market Momentum
-1.91
Positive
40.64
Neutral
32.53
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SGI, the sentiment is Negative. The current price of 71.56 is above the 20-day moving average (MA) of 67.69, above the 50-day MA of 71.49, and below the 200-day MA of 80.07, indicating a bearish trend. The MACD of -1.91 indicates Positive momentum. The RSI at 40.64 is Neutral, neither overbought nor oversold. The STOCH value of 32.53 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for SGI.
Somnigroup International Risk Analysis
Somnigroup International disclosed 21 risk factors in its most recent earnings report. Somnigroup International reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Somnigroup International Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
75 Outperform | $24.03B | 31.39 | 17.78% | 1.23% | 2.69% | 46.04% | |
64 Neutral | $36.71B | 18.35 | 122.57% | 4.63% | -12.19% | -19.22% | |
61 Neutral | $18.38B | 12.79 | -2.54% | 3.03% | 1.52% | -15.83% | |
61 Neutral | $73.30B | 35.46 | 631.14% | 2.31% | 5.24% | -29.04% | |
61 Neutral | $36.88B | 21.60 | 15.58% | 4.30% | 1.75% | 16.81% | |
59 Neutral | $13.90B | 25.49 | 17.11% | 0.89% | 27.07% | 73.19% | |
57 Neutral | $12.78B | 21.98 | -1893.55% | 5.19% | -5.41% | -26.46% |
* Consumer Cyclical Sector Average
SGI
Somnigroup International
65.01
-14.92
-18.67%
CHD
Church & Dwight
97.98
6.37
6.95%
CLX
Clorox
105.94
-8.22
-7.20%
CL
Colgate-Palmolive
90.21
8.01
9.74%
KMB
Kimberly Clark
107.91
-17.29
-13.81%
KVUE
Kenvue, Inc.
18.79
-1.34
-6.67%
Somnigroup International Corporate Events
Business Operations and StrategyM&A Transactions
Somnigroup International Updates Strategy Amid Bedding Recovery
Positive
Aug 6, 2026
On August 6, 2026, Somnigroup International released an updated investor presentation outlining its investment thesis and strategic priorities as the global bedding industry emerges from a prolonged downturn. The materials emphasize the company...
Business Operations and StrategyPrivate Placements and FinancingRegulatory Filings and Compliance
Somnigroup International Refinances And Extends Credit Facilities
Positive
Jul 27, 2026
On July 27, 2026, Somnigroup International Inc. executed Amendment No. 5 to its 2023 Credit Agreement, refinancing and extending its senior secured facilities. The company secured a new $1.2 billion term loan A and expanded its revolving credit co...
Business Operations and StrategyM&A TransactionsRegulatory Filings and Compliance
Somnigroup Clears Key Antitrust Hurdle in Leggett Merger
Positive
Jun 4, 2026
On April 13, 2026, Somnigroup International Inc. agreed to merge its wholly owned subsidiary Sparrow Unity Corporation with Leggett Platt, Incorporated, leaving Leggett Platt as a direct wholly owned subsidiary of Somnigroup. On June 4, 2026, th...
Business Operations and StrategyExecutive/Board ChangesShareholder Meetings
Somnigroup Stockholders Approve Governance Changes and Share Increase
Positive
May 15, 2026
At Somnigroup International’s annual meeting of stockholders held on May 13, 2026, investors representing nearly all outstanding shares participated in key governance decisions, including the election of the full slate of board nominees and ...
Business Operations and StrategyStock BuybackDividendsM&A Transactions
Somnigroup Highlights Vertically Integrated Bedding Growth Strategy
Positive
May 7, 2026
On May 7, 2026, Somnigroup International Inc. released an updated investor presentation outlining its strategy as a vertically integrated bedding leader spanning design, manufacturing, logistics and omnichannel retail under brands such as Tempur-P...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.