Somnigroup International Inc. (SGI) stock analysis

P/E above its 5-year median

Somnigroup International's P/E of 25.9 is above its own 5-year median of 24.2.

P/E above the industry

Somnigroup International's P/E of 25.9 is above the Consumer discretionary median of 19.6.

EV/EBITDA above its 5-year median

Somnigroup International's EV/EBITDA of 14.3 is above its 5-year median of 14.2.

P/S above the industry

Somnigroup International's price-to-sales of 1.68 is above the Consumer discretionary median of 0.65 (book value is negative, so we use sales).

Trading above fair value

The share price of $62.49 is above our fair value estimate of $44.07.

Margin of safety under 20%

The price is 41.8% above fair value, so there is no margin of safety.

Revenue growing 10%+ a year

Revenue grew 15.0% a year over the last three fiscal years.

EPS growing under 10% a year

Diluted EPS grew -10.1% a year over the last three fiscal years.

Earnings growth accelerating

Net income grew 64.8% over the last twelve months, against a 5-year average of 1.9% a year.

Growing faster than the industry

Revenue grew 15.1% over the last twelve months; the Consumer discretionary median is 0.2%.

Guidance lowered

Somnigroup International lowered its full year 2026 adjusted EPS outlook on Aug 6, 2026.

Gross margin improving

Gross margin was 43.4% over the last twelve months, against 41.7% a year earlier.

Return on equity

Needs positive equity and five years of results.

Return on invested capital

Needs operating income and invested capital.

Return on equity against the industry

Needs positive equity.

Earnings grew over 5 years

Net income grew 1.9% a year on average over the last five fiscal years.

Net margin below its 5-year average

Net margin was 6.6% over the last twelve months, against a 5-year average of 8.5%.

Net margin above the industry

Somnigroup International's net margin of 6.6% is above the Consumer discretionary median of -2.4%.

Debt level

Needs debt and equity figures.

Debt trend

Needs a balance sheet from five years ago with positive equity.

Debt not well covered by cash flow

Operating cash flow over the last twelve months equals 17.3% of total debt; we look for at least 20%.

Interest not well covered

Operating income covers interest expense 3.8 times; we look for at least 5.

Short-term assets cover short-term debts

Current assets are 1.23 times current liabilities.

Elevated bankruptcy risk

The Altman Z-score is 1.50; above 3 is the safe zone and below 1.8 the distress zone.

Pays a dividend

Somnigroup International paid dividends worth 1.1% of the share price over the last twelve months.

Yield below Treasuries

The 1.1% yield is below the 4.4% on a 1-year Treasury.

Yield below the top quarter

The top quarter of US dividend payers yield 3.8% or more; Somnigroup International yields 1.1%.

Dividend not cut

The dividend per share has not fallen by more than 10% in any of the last 5 fiscal years.

Covered by earnings

Dividends take 26.9% of net income.

Covered by free cash flow

Dividends take 20.0% of free cash flow.