Somnigroup International (SGI) AI Stock Analysis

• Market Cap: $15.60B
• Dividend Yield: 0.67%
• Average Volume (3M): 2.25M
• Price to Earnings (P/E): 47.9
• Beta (1Y): 1.03
• Revenue Growth: 39.29%
• EPS Growth: -30.44%
• Country: US
• Employees: 12,000
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Household & Personal Products
• EPS (TTM): 0.72
• Shares Outstanding: 210,340,620
• 10 Day Avg. Volume: 2,391,964
• 30 Day Avg. Volume: 2,245,690
• PEG Ratio: -3.02
• Price to Book (P/B): 5.92
• Price to Sales (P/S): 2.46
• P/FCF Ratio: 29.05
• Enterprise Value/Market Cap: 1.52
• Enterprise Value/Revenue: 3.17
• Enterprise Value/Gross Profit: 7.42
• Enterprise Value/Ebitda: 23.24
• 1Y Price Target: $103.43
• Price Target Upside: 39.47% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 8
• EPS Forecast (FY): 3.3
• Revenue Forecast (FY): $7.95B

• Rating: 61 Neutral
• Price Target: $80.00 ▲(7.87% Upside)
• Action: Reiterated Date: 03/04/26
• Date: Action: Reiterated 03/04/26

The score is driven primarily by improving fundamentals and strong cash generation, supported by upbeat guidance and synergy-driven margin expansion expectations. Offsetting these positives are weak near-term technicals and a demanding valuation (high P/E with a modest yield).

Positive Factors

Strong cash generation

Sustained operating cash flow (~$800M) and robust free cash flow (~$633M) provide durable internal funding for capex, deleveraging, and shareholder returns. Strong cash conversion (FCF covering ~79% of net income) underpins financial flexibility over the next 2–6 months.

Scale & vertical integration

Leading scale and vertical integration (R&D, manufacturing, logistics, omni-channel retail) deliver structural cost advantages, distribution breadth and faster product-to-market cycles. These strengths support margin resilience and market-share capture as demand normalizes.

Mattress Firm integration & synergies

Realized and upsized synergies from the Mattress Firm deal (incremental cost and sales synergies ramping 2025–2027) improve structural EBITDA generation. The integration raises DTC penetration (~65%) and should sustainably lift margins and retail economics as synergy targets are achieved.

Negative Factors

Material leverage and net debt

A sizable net debt balance (~$4.6B) and leverage around 3.2x limit financial flexibility and raise interest-cost sensitivity. Until leverage reaches the 2–3x target, capital allocation choices (M&A, buybacks) may be constrained and refinancing or cyclical shocks could stress returns.

Net margin compression

Despite steady gross margins, operating and net profitability weakened in 2025, suggesting higher operating costs, integration impacts, or margin mix shifts. Persistent margin pressure reduces durable earnings power and slows return-on-capital recovery even if revenue resumes growth.

Direct-channel underperformance

Declines in higher-margin direct channels (stores and e‑commerce) weaken overall margin profile and force greater reliance on wholesale. Reversing DTC weakness requires marketing, retail refreshes, or repricing, any of which can be resource-intensive and slow to restore profit mix.

Somnigroup International Business Overview & Revenue Model

Company Description

Somni is a company specializing in sleep technology and wellness solutions, developing innovative products to enhance sleep quality. The company integrates science-backed methods, smart technology, and data-driven insights to improve sleep patterns and overall well-being.

How the Company Makes Money

SGI primarily makes money by selling mattresses and other sleep-related products through two core routes: (1) wholesale sales to third-party retailers and other business customers, and (2) direct-to-consumer (DTC) sales through company-operated channels. In wholesale, SGI generates revenue by supplying its branded products to retail partners, where revenue is recognized from shipments/sales to those partners. In DTC, SGI earns revenue from transactions made directly by consumers via its own e-commerce and/or company-operated retail locations, capturing the full retail selling price rather than a wholesale price. Across both routes, revenue is driven by unit volume and average selling price of mattresses, plus incremental sales of accessories and complementary sleep products (e.g., foundations/bases and other add-ons where offered). Significant factors that typically influence earnings include product mix (premium vs. value offerings), channel mix (wholesale vs. DTC), promotional cadence/discounting, manufacturing and logistics costs, and retailer relationships (for wholesale distribution). Specific, named partnerships or quantitative revenue breakdowns by stream are null.

Somnigroup International Financial Statement Overview

Summary

Revenue accelerated in 2025 and cash generation remains strong, but 2025 margin compression and a still-meaningful debt load (despite improved leverage and rebuilt equity) keep fundamentals in the middle range.

Income Statement

Revenue accelerated in 2025 (+9.69% vs. ~flat growth in 2022–2024), but profitability trended weaker: net margin fell to ~5.1% in 2025 from ~7.5–9.3% in 2022–2024 and ~12.7% in 2021. Gross margin has been relatively steady in the low-to-mid 40% range, but operating profitability appears less consistent (and 2025 shows weaker operating leverage), suggesting higher costs and/or integration/one-time impacts despite the stronger top-line.

Balance Sheet

Leverage improved materially in 2025, with debt-to-equity down to ~0.68 versus extremely elevated levels in 2023–2024 (~10x and ~8x) and negative equity in 2022. Equity has rebuilt strongly to ~$3.1B in 2025 (from $0.56B in 2024), reducing balance-sheet risk, though total debt remains sizable at ~$2.1B. Returns on equity normalized to ~12% in 2025 after highly distorted readings in 2021–2024 driven by very low equity.

Cash Flow

Cash generation is solid: operating cash flow rose to ~$800M in 2025 and free cash flow remained strong at ~$633M. Free cash flow covered ~79% of net income in 2025 (and generally ~67–85% in 2020–2024), indicating good earnings quality. The main weakness is a 2025 free-cash-flow decline (-9.6%) after prior growth, and operating cash flow relative to profits is not consistently high year-to-year, pointing to some working-capital or timing volatility.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	7.48B	4.93B	4.93B	4.92B	4.93B
Gross Profit	3.32B	2.18B	2.13B	2.05B	2.16B
EBITDA	1.04B	804.20M	739.30M	807.30M	1.00B
Net Income	384.10M	384.30M	368.10M	455.70M	624.50M
Balance Sheet
Total Assets	11.61B	5.98B	4.55B	4.36B	4.32B
Cash, Cash Equivalents and Short-Term Investments	134.90M	117.40M	74.90M	69.40M	300.70M
Total Debt	8.26B	4.47B	3.27B	3.37B	2.86B
Total Liabilities	8.50B	5.41B	4.22B	4.37B	4.03B
Stockholders Equity	3.11B	559.00M	323.40M	-22.10M	285.80M
Cash Flow
Free Cash Flow	633.20M	569.20M	384.90M	72.30M	599.80M
Operating Cash Flow	800.10M	666.50M	570.30M	378.80M	723.10M
Investing Cash Flow	-3.02B	-96.70M	-187.80M	-315.60M	-555.70M
Financing Cash Flow	616.90M	1.08B	-384.30M	-279.10M	76.50M

Somnigroup International Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 74.16
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Positive
• STOCH: Positive

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 74.16 is below the 20-day moving average (MA) of 82.56, below the 50-day MA of 88.60, and below the 200-day MA of 82.66, indicating a bearish trend. The MACD of -4.07 indicates Positive momentum. The RSI at 28.19 is Positive, neither overbought nor oversold. The STOCH value of 12.45 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for SGI.

Somnigroup International Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CHD	73 Outperform	$22.39B	27.62	17.16%	1.38%	1.45%	42.04%
KVUE	68 Neutral	$33.41B	22.42	13.94%	4.85%	-2.94%	34.54%
SGI	61 Neutral	$15.60B	47.88	13.16%	0.67%	39.29%	-30.44%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
CL	61 Neutral	$68.53B	29.97	431.59%	2.67%	-0.05%	2.49%
KMB	61 Neutral	$32.72B	16.63	155.28%	5.03%	-10.04%	-23.41%
CLX	56 Neutral	$12.89B	19.52	1502.49%	5.05%	-9.35%	123.06%

Somnigroup International Corporate Events

Somnigroup International Hosts Investor Day Outlining Strategic Vision

Somnigroup International Inc. held its Investor Day on Wednesday, March 4, 2026, featuring executive management presentations on the company’s strategic vision, growth initiatives across business units, multi-year financial target framework, and capital allocation approach. The event, accessible via live webcast and later replay on the company’s investor relations website, underscores Somnigroup’s efforts to enhance transparency and engagement with investors through detailed operational and financial roadmaps.

The most recent analyst rating on (SGI) stock is a Hold with a $101.00 price target. To see the full list of analyst forecasts on Somnigroup International stock, see the SGI Stock Forecast page.

Somnigroup Updates Strategy Amid Global Bedding Market Recovery

On February 17, 2026, Somnigroup International Inc. released an updated investor presentation outlining its positioning as the world’s largest bedding company and its strategy for capturing growth as the global bedding market recovers. The deck underscores Somnigroup’s vertically integrated model, spanning advanced R&D, global manufacturing, logistics, and omni-channel retail through banners such as Mattress Firm in the U.S., Dreams in the U.K., and Tempur Sealy’s worldwide operations.

Management emphasizes the company’s ability to drive higher direct-to-consumer penetration, optimize its 2,800-plus store footprint, and expand e-commerce and company-owned stores alongside a broad wholesale network. The materials also highlight Somnigroup’s scale advantages, resilient free cash flow, and disciplined capital allocation, with billions invested in M&A, capacity, and shareholder returns, reinforcing its bid to consolidate market share and benefit disproportionately from an anticipated rebound in U.S. and international bedding demand.

The most recent analyst rating on (SGI) stock is a Hold with a $90.00 price target. To see the full list of analyst forecasts on Somnigroup International stock, see the SGI Stock Forecast page.

Somnigroup International advances due diligence on Leggett & Platt bid

On January 20, 2026, Somnigroup International announced that Leggett & Platt’s board had authorized discussions and signed a customary non-disclosure agreement to allow due diligence on Somnigroup’s previously disclosed all-stock proposal. Somnigroup reaffirmed its December 1, 2025 offer to acquire Leggett & Platt at an implied value of $12 per share, representing a 30% premium to Leggett & Platt’s unaffected 30‑day average share price, and said it would not revise the proposal prior to completion of due diligence. The company stressed that there is no assurance a definitive agreement will be reached or that any transaction will be completed, noting that any deal would require Leggett & Platt shareholder and regulatory approvals but would not be subject to financing contingencies or approval by Somnigroup’s shareholders, a structure that could streamline execution if negotiations succeed. Somnigroup has engaged Goldman Sachs as financial adviser and Cleary Gottlieb as legal counsel, underscoring the seriousness of its pursuit as it seeks a combination it says would create long-term value for investors in both companies.

The most recent analyst rating on (SGI) stock is a Buy with a $104.00 price target. To see the full list of analyst forecasts on Somnigroup International stock, see the SGI Stock Forecast page.