Somnigroup International (SGI) AI Stock Analysis

• Market Cap: $18.92B
• Dividend Yield: 0.67%
• Average Volume (3M): 1.78M
• Price to Earnings (P/E): 49.0
• Beta (1Y): 0.99
• 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: 209,907,670
• 10 Day Avg. Volume: 2,313,015
• 30 Day Avg. Volume: 1,775,452
• 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: 1.40
• Enterprise Value/Revenue: 3.53
• Enterprise Value/Gross Profit: 8.25
• Enterprise Value/Ebitda: 25.93
• 1Y Price Target: $99.50
• Price Target Upside: 14.30% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 8
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 64 Neutral
• Price Target: $94.00 ▲(7.98% Upside)
• Action: Reiterated Date: 02/18/26
• Date: Action: Reiterated 02/18/26

The score is driven primarily by improving financial health and strong free-cash-flow generation, supported by an upbeat earnings outlook with synergy-led margin and EPS expansion targets. These positives are tempered by a rich valuation (high P/E, low yield) and mixed technical setup with the stock trading below key shorter-term moving averages.

Positive Factors

Strong cash generation

Sustained operating cash flow and high free cash flow provide durable internal funding for capex, marketing, dividends and M&A. This cash conversion reduces reliance on markets for financing, supports synergy implementation and boosts resilience through cyclical downturns.

Balance-sheet repair and lower leverage

Material improvement in equity and leverage restores financial flexibility and reduces solvency risk. A stronger capital base enables strategic investments and shareholder returns while lowering refinancing and covenant pressure as the company works toward target leverage.

Scale, vertical integration and broad distribution

Significant scale, vertical R&D/manufacturing and an omni‑channel retail network create durable competitive advantages: procurement cost levers, faster product cycles, distribution reach and bargaining power that support margin recovery and sustained market share gains.

Negative Factors

Weakened profitability

Declining net margin and inconsistent operating leverage signal structural profit pressure from integration costs, commodity headwinds and launch phasing. Lower conversion of revenue to profit raises sensitivity to demand shocks and slows durable EPS growth.

Elevated consolidated net debt and leverage

High net debt requires sizeable interest and restricts strategic optionality until leverage falls. Debt servicing and targets to reach 2–3x create a multi‑quarter constraint on aggressive buybacks or M&A and increase vulnerability to cyclical demand and interest rate rises.

Intercompany eliminations complicate revenue comparability

Large intercompany eliminations from the Mattress Firm/Tempur combination create persistent reporting distortions that obscure organic growth, complicate trend analysis and may delay market recognition of true underlying demand and margin progress over multiple quarters.

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

Somnigroup International generates revenue through multiple streams, primarily by selling its flagship sleep technology products, which include wearable sleep trackers, smart pillows, and sleep optimization software. Additionally, SGI offers subscription-based services for personalized sleep coaching and access to an exclusive app that provides tailored sleep improvement plans. The company has established significant partnerships with healthcare providers and wellness organizations, enabling them to reach a broader audience and integrate their products into clinical settings. Moreover, SGI earns revenue through licensing agreements with other companies in the health and wellness industry, allowing them to utilize SGI's proprietary technology and research in their own products.

Somnigroup International Financial Statement Overview

Summary

Fundamentals are improving, led by strong cash generation (2025 operating cash flow ~$800M; free cash flow ~$633M with generally good earnings quality) and meaningful balance-sheet repair (debt-to-equity down to ~0.68 and equity rebuilt to ~$3.1B). Offsetting this, 2025 profitability weakened with net margin falling to ~5.1% from ~7.5–9.3% in 2022–2024, and total debt remains sizable.

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	1.28B	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: 87.05
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: 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 87.05 is below the 20-day moving average (MA) of 92.38, below the 50-day MA of 91.93, and above the 200-day MA of 81.20, indicating a neutral trend. The MACD of -0.56 indicates Positive momentum. The RSI at 41.18 is Neutral, neither overbought nor oversold. The STOCH value of 27.92 is Neutral, 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	$24.30B	34.04	17.62%	1.38%	1.45%	42.04%
KVUE	68 Neutral	$36.17B	24.84	14.39%	4.85%	-2.94%	34.54%
CL	65 Neutral	$77.04B	36.34	1602.26%	2.67%	-0.05%	2.49%
SGI	64 Neutral	$18.92B	48.98	20.95%	0.67%	39.29%	-30.44%
CLX	62 Neutral	$14.90B	20.13	―	5.05%	-9.35%	123.06%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
KMB	61 Neutral	$36.48B	18.12	147.22%	5.03%	-10.04%	-23.41%

Somnigroup International Corporate Events

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.

Somnigroup Proposes Acquisition of Leggett & Platt

On December 1, 2025, Somnigroup International Inc. announced a proposal to acquire Leggett & Platt in an all-stock transaction, offering a 30.3% premium to Leggett & Platt’s average closing price over the last 30 trading days. This acquisition aims to provide significant value to Leggett & Platt shareholders and enhance the growth potential of the combined company, with Leggett & Platt continuing to operate independently under Somnigroup’s umbrella.

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.