Somnigroup International (SGI) AI Stock Analysis

• Market Cap: $17.62B
• Dividend Yield: 0.53%
• Average Volume (3M): 2.58M
• Price to Earnings (P/E): 58.8
• Beta (1Y): 1.13
• Revenue Growth: 23.05%
• EPS Growth: -32.01%
• Country: US
• Employees: 12,000
• Sector: Consumer Cyclical
• Sector Strength: 80
• Industry: Household & Personal Products
• EPS (TTM): 0.53
• Shares Outstanding: 209,888,100
• 10 Day Avg. Volume: 2,275,162
• 30 Day Avg. Volume: 2,583,808
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 1.20
• Enterprise Value/Revenue: 3.54
• Enterprise Value/Gross Profit: 8.41
• Enterprise Value/Ebitda: 29.37
• 1Y Price Target: $81.00
• Price Target Upside: -3.78% Downside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 6

• Rating: 70 Outperform
• Price Target: $92.00 ▲(9.29% Upside)

Somnigroup International's overall stock score reflects strong financial performance and positive earnings call highlights, including record sales and strategic growth initiatives. However, high valuation metrics and potential liquidity concerns temper the outlook. The technical analysis suggests strong momentum, but caution is advised due to overbought conditions.

Positive Factors

Acquisition Synergies

There is upside to management’s latest estimate of revenue synergies from the Mattress Firm acquisition, suggesting potential for increased profitability.

Financial Performance

Earnings exceeded expectations despite sales falling slightly short for the quarter.

Market Position

SGI continues to gain market share with new Sealy Posturepedic hybrid beds and the Tempur-Pedic brand, offset by underperforming Stearns & Foster.

Negative Factors

Gross Margin

Gross margin of 42.2% decreased by some 115 basis points year-over-year and landed nearly 105 basis points below the Street’s expectations of 43.3%.

Regional Sales Performance

North America sales were down 22% year over year (versus consensus of a 15% decline).

Sales Outlook

Management brought down its outlook for sales by 3% and EPS by 12%.

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 generates revenue through multiple streams. The primary source of income comes from the sale of its smart sleep tracking devices and accessories, which are marketed directly to consumers via online platforms and retail partnerships. Additionally, SGI offers subscription-based services for its sleep-enhancing applications, providing users with personalized insights, coaching, and access to premium content. The company also collaborates with healthcare providers and organizations to integrate its technology into clinical settings, creating additional revenue through partnerships and licensing agreements. Furthermore, SGI invests in research and development to innovate new products, which helps maintain its competitive edge and attract new customers.

Somnigroup International Financial Statement Overview

Summary

Somnigroup International shows strong financial performance with consistent revenue growth and profitability. However, the high debt-to-equity ratio indicates significant leverage, which poses potential risks despite the company's effective cash generation and return on equity.

Income Statement

Somnigroup International has demonstrated consistent revenue growth over the years, with a notable increase in gross profit margin, indicating improved cost management. The net profit margin has been stable, reflecting effective expense control. EBIT and EBITDA margins have shown healthy levels, contributing to robust profitability. Despite minor fluctuations, the overall trajectory is positive, showcasing strong financial performance.

Balance Sheet

The company maintains a high debt-to-equity ratio, suggesting significant leverage. However, the positive return on equity indicates efficient use of shareholder funds. The equity ratio is relatively low, implying reliance on debt financing. While this presents potential risk, the company's ability to generate returns tempers concerns.

Cash Flow

Operating cash flow has consistently covered net income, showing strong cash generation capabilities. Free cash flow growth has been positive, supporting capital expenditures and financing activities. The cash flow ratios reflect effective cash management, although high financing cash flows suggest reliance on external funding.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	5.99B	4.93B	4.93B	4.92B	4.93B	3.68B
Gross Profit	2.52B	2.18B	2.13B	2.05B	2.16B	1.64B
EBITDA	722.20M	804.20M	739.30M	807.30M	1.00B	627.40M
Net Income	267.80M	384.30M	368.10M	455.70M	624.50M	348.80M
Balance Sheet
Total Assets	11.38B	5.98B	4.55B	4.36B	4.32B	3.31B
Cash, Cash Equivalents and Short-Term Investments	98.10M	117.40M	74.90M	69.40M	300.70M	65.00M
Total Debt	6.84B	4.47B	3.27B	3.37B	2.86B	1.70B
Total Liabilities	8.53B	5.41B	4.22B	4.37B	4.03B	2.80B
Stockholders Equity	2.84B	559.00M	323.40M	-22.10M	285.80M	503.60M
Cash Flow
Free Cash Flow	580.20M	569.20M	384.90M	72.30M	599.80M	543.40M
Operating Cash Flow	678.20M	666.50M	570.30M	378.80M	723.10M	654.70M
Investing Cash Flow	-2.92B	-96.70M	-187.80M	-315.30M	-554.80M	-146.60M
Financing Cash Flow	2.21B	1.08B	-384.30M	-279.10M	76.50M	-522.60M

Somnigroup International Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 84.18
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SGI, the sentiment is Positive. The current price of 84.18 is above the 20-day moving average (MA) of 80.08, above the 50-day MA of 74.89, and above the 200-day MA of 63.60, indicating a bullish trend. The MACD of 2.96 indicates Negative momentum. The RSI at 70.80 is Negative, neither overbought nor oversold. The STOCH value of 83.51 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for SGI.

Somnigroup International Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ELF	77 Outperform	$7.09B	74.50	12.97%	―	18.61%	-21.36%
SGI	70 Outperform	$17.62B	58.78	16.47%	0.53%	23.05%	-32.01%
HIMS	66 Neutral	$9.57B	53.00	41.88%	―	88.69%	947.74%
IPAR	65 Neutral	$3.69B	22.79	20.68%	2.72%	7.04%	13.52%
Sector *	61 Neutral	$17.87B	13.25	-4.88%	3.05%	1.25%	-14.67%
EL	50 Neutral	$33.01B	147.29	-24.69%	1.54%	-8.14%	-389.12%
COTY	46 Neutral	$3.73B	40.12	-9.98%	―	-3.68%	-631.67%

Somnigroup International Corporate Events

Somnigroup International Joins 2025 Goldman Sachs Conference

On September 2, 2025, Somnigroup International Inc. announced its participation in the 2025 Goldman Sachs Global Retailing Conference on September 3, 2025, highlighting the continuation of positive sales trends from early in the third quarter. The company’s leadership expressed confidence in leveraging favorable market conditions to enhance its performance, indicating potential positive impacts on its operations and industry standing.

Somnigroup International Appoints New CEO for Subsidiary

On August 14, 2025, Somnigroup International‘s Board of Directors expanded Steven H. Rusing’s role from President to President and Chief Executive Officer of Mattress Firm, a wholly-owned subsidiary. This strategic move, announced on August 18, 2025, aims to enhance leadership agility and operational focus, with Rusing having already positively impacted the company’s direction and strategy since his initial appointment.

Somnigroup International Updates Investors on Strategic Initiatives

On August 7, 2025, Somnigroup International Inc. released an updated investor presentation highlighting its strategic initiatives and market positioning. The company, reimagined in February 2025 following the acquisition of Mattress Firm, emphasizes its competitive advantages in the bedding industry, including its strong financial flexibility and seasoned management team. The presentation outlines opportunities for growth through market share gains, product innovation, and operational efficiencies, while addressing tariff impacts and capital allocation strategies.

Somnigroup International Optimizes Debt with Loan Repricing

On June 24, 2025, Somnigroup International Inc. and its subsidiaries entered into Amendment No. 4 to the 2023 Credit Agreement with several banks, including Bank of America, to reprice its Term B loans due in October 2031. The amendment reduces the applicable margin on these loans by 0.25% and involves a $100 million prepayment of the outstanding loans. This financial maneuver is expected to optimize the company’s debt structure without altering other material terms of the Credit Agreement.

Somnigroup Extends CEO Scott Thompson’s Contract

On June 23, 2025, Somnigroup International extended Scott Thompson’s employment contract as Chairman, CEO, and President to December 31, 2029, recognizing his leadership in increasing the company’s share price by over 250% since 2015. Thompson was awarded a $10 million bonus for his role in acquiring Mattress Firm and granted 1.2 million stock options, reflecting the company’s confidence in his ability to guide Somnigroup through future growth and opportunities.