Somnigroup International Inc (SGI)
Valuation Overview•Is Somnigroup International Inc Overvalued or Undervalued?
Priced at a premium to peer multiples and intrinsic cash flows, demanding strong execution to justify current levels.
Moderate quality score of 48/100, reflecting stable operating margins and manageable leverage.
Analysts remain bullish, forecasting further upside expansion with consensus targets suggesting solid gains.
Verdict: Average quality business weighed down by significant solvency concerns.
Wall Street is highly bullish, projecting significant upside alongside robust expected earnings growth. However, capital return yields remain modest, driven predominantly by aggressive share repurchases.
SGI demonstrates strong business quality with robust profitability and healthy margins. However, this is severely offset by a highly leveraged balance sheet (Debt/EBITDA > 4.0x) and elevated financial risk.
The company demonstrates solid revenue growth (15.0% 3Y CAGR) however, earnings have severely contracted over the same period. Operating efficiency remains adequate with margins around 12.4%.
| Financial Metric | Trend (12Q) | Latest Qtr | 1Y Growth | 3Y CAGR | 5Y CAGR | 10Y CAGR |
|---|---|---|---|---|---|---|
| Revenue | $1.8B | +51.6% | +15.0% | +15.3% | +25.8% | |
| EBITDA | $268.5M | — | +16.5% | — | — | |
| Net Income | $104.2M | -0.1% | -5.5% | — | — | |
| EPS (Diluted) | $0.49 | -14.8% | -10.1% | +2.3% | — | |
| Free Cash Flow | $186.0M | +11.2% | +106.1% | +3.1% | — |
| Metric | TTM | 3Y Avg | 5Y Avg | 10Y Avg |
|---|---|---|---|---|
| Gross Margin | 44.4% | 43.9% | 43.4% | 36.5% |
| Operating Margin | 12.4% | 12.8% | 14.1% | 6.6% |
| Net Margin | 6.8% | 6.8% | 8.5% | 3.2% |
| FCF Margin | 9.6% | 9.3% | 8.3% | 14.9% |
| Quarter | EPS Est. | EPS Act. | Surprise | EPS | Rev |
|---|---|---|---|---|---|
| Q2'26Latest | $0.57 | $0.59 | +2.8% | ||
| Q1'26 | $0.72 | $0.72 | +0.1% | ||
| Q4'25 | $0.86 | $0.95 | +10.7% | ||
| Q3'25 | $0.51 | $0.53 | +3.9% | ||
| Q2'25 | $0.47 | $0.49 | +4.3% | ||
| Q1'25 | $0.57 | $0.60 | +5.3% | ||
| Q4'24 | $0.81 | $0.82 | +1.2% | ||
| Q3'24 | — | $0.73 | — |
Total return is +16.6% (1Y), lagging the benchmark by -8.4%
| Period | Total Return | vs S&P 500 (Alpha) | Dividend Contribution |
|---|---|---|---|
| YTD | -15.0% | -24.3% | — |
| 1Y | +16.6% | -8.4% | +1.0% |
| 3YCAGR | +26.3% | +6.2% | +4.4% |
| 5YCAGR | +15.8% | +3.0% | +6.7% |
| 10YCAGR | +18.0% | +4.5% | — |
The S&P 500 is at 31.3x trailing P/E — Expensive relative to historical averages.
Quick answers to common questions about Somnigroup International Inc (SGI) valuation, health, and returns.
Somnigroup International Inc is estimated to be overvalued under our discounted cash flow framework. relative multiples indicate the stock is Expensive versus peers compared to industry peers. overvalued (implying -31.3% downside from DCF intrinsic value of $51.61)
Somnigroup International Inc has multiple valuation anchors: DCF Intrinsic Value: $51.61 | Peer Relative Fair Value: $35.51 | Wall Street Analyst Target: $99.00 (implying +31.8% upside). A convergence of these signals offers higher conviction.
Somnigroup International Inc displays fair financial health with a composite quality score of 48/100, supported by a Altman Z-Score of 1.8 (distress zone), Piotroski F-Score of 5/9, Return on Invested Capital (ROIC) of 9.1%.
Somnigroup International Inc pays a 0.8% dividend yield, covered by a 33% payout ratio with 4 years of growth, supplemented by a 0.8% buyback yield.
Somnigroup International Inc's current growth trajectory is Accelerating. The company achieved +51.6% 1Y revenue growth and -14.8% 1Y EPS growth, compared to its 3Y revenue CAGR of +15.0%.
Wall Street consensus is Buy based on 11 analysts, beating EPS expectations in 67% of recent quarters with a 7-quarter streak. The consensus price target represents a +31.8% change from current levels.
Investment risks for Somnigroup International Inc include: -37.2% 1-year max drawdown, high beta (1.46x market volatility), elevated distress risk. Volatility risk is characterized by a beta of 1.46x.
No. These computations are purely quantitative model outputs for informational purposes. They do not account for qualitative management shifts or macro events. Always consult a licensed RIA before buying or selling shares.
Disclaimer: This page is for informational purposes only and does not constitute financial advice. All valuation models, scores, and target estimates are automated computations under stated assumptions and should not be relied upon as the sole basis for any investment decision.