# Somnigroup International (SGI.US)

Canonical: https://gigainvestors.com/s/SGI

Analysis as of: 2026-10-16T07:31:52.103Z. Financial observations: FY2005–FY2025.

Listing currency: USD. Reporting currency: USD.

## Verdict

A wonderful business at too high a price

Quality tests for Buy: pass (profit record: pass; earnings resilience is evidence only). Published buy qualification: no.

Share price: $64.78 per share; close as of 2026-10-15.

Estimated value: low $31.87 per share, central $45.53 per share, high $53.49 per share. Buy at or below the central value $45.53 per share. Valuation as of 2026-10-16T07:31:52.103Z; scenarios are not confidence intervals.

Expected annual return: 8.0% at the stated quote. About 8.0% a year at today's price (required return 10.0%). required return 10.0% a year (10% floor; US 10-year bond 5.1% + 4 points).

## Checklist

### understandable: fail

- 1 revenue decline in the last 10 years (informational)

- operating margin variation exceeds 0.35

- Financial history: 10 years

- Years with declining revenue: 1

- Years with a net loss: 1

- Operating margin variation: 0.39×

Chart: Operating margin; fiscal year observations.

- FY2016: -0.00×

- FY2017: 0.11×

- FY2018: 0.09×

- FY2019: 0.11×

- FY2020: 0.14×

- FY2021: 0.19×

- FY2022: 0.14×

- FY2023: 0.12×

- FY2024: 0.13×

- FY2025: 0.13×

### moat: pass

- Years with nonpositive invested capital use equity plus debt and leases; positive earnings with no positive capital are shown above 100%.

- ROIC, median of available years: 19.8%

- ROIC, second-lowest year: 11.9%

- Typical minus recent gross margin: -1.0 pp

- Typical gross margin (annual median): 43.2%

- Recent gross margin (lower of latest and 3-year median): 44.2%

- Years with nonpositive capital: 1

- Capital spending / revenue: 2.8%

- ROIC including acquisitions, ten-year median: 9.0%

Chart: ROIC excluding acquisitions; fiscal year observations.

- FY2016: -0.8%

- FY2017: 21.2%

- FY2018: 18.4%

- FY2019: 20.2%

- FY2020: 29.9%

- FY2021: 39.9%

- FY2022: 24.4%

- FY2023: 19.5%

- FY2024: 12.6%

- FY2025: 11.9%

### economics: pass

- Owner earnings / net income, 5-yr: 0.96×

- Cash conversion uses consolidated totals: No

- Owner earnings, five-year total: $2.1B

- Net income, five-year total: $2.2B

- Return on incremental invested capital: 114.7%

- Working capital / revenue, annual change: 1.4 pp

- Working capital / revenue, change between three-year averages: 9.0 pp

- Working capital / revenue, final three-year average: 10.0%

Chart: Annual owner cash / profit; fiscal year observations.

- FY2021: 1.00×

- FY2022: 0.61×

- FY2023: 0.87×

- FY2024: 1.18×

- FY2025: 1.22×

### management: pass

- Historical market-dollar context (not the management verdict): 2016 to 2025 (9 years)

- potential debt-funded buybacks (informational)

- buybacks leaned toward cheaper years (informational)

- ROIC first 3 years vs last 3 years: 18.4% vs 12.6%

- Per-share earnings: -0.05 to 2.08 (three-year endpoint medians)

- Management verdict uses per-share economic progress: Yes

- Ordinary dilution, 10-year annual growth: -1.8%

- Ordinary dilution, 5-year annual growth: -0.3%

- Market cap gain: $15B

- Cumulative retained earnings: $4.3B

- Diluted shares, 10-year annual growth: -1.8%

- Diluted shares, 5-year annual growth: -0.3%

- $1 test, starting fiscal year: FY2016

- $1 test, ending fiscal year: FY2025

- Per-share value change: $2.12

- Per-share value, starting three-year median: -$0.05

- Per-share value, ending three-year median: $2.08

- Buybacks concentrated in cheaper years (correlation): 0.21

- Average buyback yield: 4.3%

- Buyback history: 10 years

- Debt-funded buybacks: Yes

- Acquisition spending: $3.3B

- Cumulative net income, 10 years: $3.0B

- ROIC, first three-year median: 18.4%

- ROIC, last three-year median: 12.6%

Chart: Earnings per share; fiscal year observations.

- FY2016: -$0.05

- FY2017: $0.69

- FY2018: $0.46

- FY2019: $0.86

- FY2020: $1.64

- FY2021: $3.06

- FY2022: $2.53

- FY2023: $2.08

- FY2024: $2.16

- FY2025: $1.84

### accounting: pass

- Sloan accruals: -3.6%

- Receivables to sales index (DSRI): 0.58×

- Restructuring years, last five: 0

- Stock compensation / operating cash flow: 5.1%

- Earnings backed by cash: Yes

- Operating cash / earnings: 2.08×

- Accounting red flags: 0

- Goodwill and intangibles / equity: 2.31×

Chart: Sloan accruals; fiscal year observations.

- FY2016: -49.6%

- FY2017: -2.7%

- FY2020: -9.2%

- FY2021: -2.3%

- FY2022: 1.8%

- FY2023: -4.4%

- FY2024: -4.7%

- FY2025: -3.6%

## Holders

- [David Abrams](https://gigainvestors.com/abc): tracked 13F investor; follow the investor page for holding quarter and amounts.

- [Daniel Loeb](https://gigainvestors.com/tp): tracked 13F investor; follow the investor page for holding quarter and amounts.

## Price story

Down 29% since Nov 2025 · "SGI Earnings Outlook Faces Pressure From Mattress Firm Risks After Q2" (finance.yahoo.com, Aug 2026) · sales +51.6%

Story as of 2026-10-16T09:59:34.376Z; price observation 2026-10-15.

Price needs cash profits to grow 10.9% a year for ten years

- 2025-08-08: Somnigroup outlines $100M synergy target and raises 2025 EPS guidance amid Mattress Firm integration ([seekingalpha.com](https://seekingalpha.com/news/4482216-somnigroup-outlines-100m-synergy-target-and-raises-2025-eps-guidance-amid-mattress-firm?utm_source=feed_news_all&utm_medium=referral&feed_item_type=news))

- 2025-11-06: Somnigroup International beats Q3 estimates, raises guidance ([seekingalpha.com](https://seekingalpha.com/news/4517103-somnigroup-international-beats-q3-estimates-raises-guidance?utm_source=feed_news_all&utm_medium=referral&feed_item_type=news))

- 2026-02-18: Somnigroup Sets Cautious 2026 Target as Bedding Maker Recalibrates, UBS Says ([finance.yahoo.com](https://finance.yahoo.com/news/somnigroup-sets-cautious-2026-target-172722634.html))

- 2026-08-11: SGI Earnings Outlook Faces Pressure From Mattress Firm Risks After Q2 ([finance.yahoo.com](https://finance.yahoo.com/markets/stocks/articles/sgi-earnings-outlook-faces-pressure-161900646.html))

### Sales · FY2024–2025

sales +51.6%; source https://www.sec.gov/Archives/edgar/data/1206264/000120626426000015/sgi-20251231.htm; observed 2026-02-27.

- FY2016: $533M 

- FY2017: $2.7B 

- FY2018: $2.7B 

- FY2019: $3.1B 

- FY2020: $3.7B 

- FY2021: $4.9B 

- FY2022: $4.9B 

- FY2023: $4.9B 

- FY2024: $4.9B 

- FY2025: $7.5B 

### Gross margin · FY2025

gross margin 44.4%; source https://www.sec.gov/Archives/edgar/data/1206264/000120626426000015/sgi-20251231.htm; observed 2026-02-27.

- FY2016: 27.1% 

- FY2017: 41.5% 

- FY2018: 41.5% 

- FY2019: 43.2% 

- FY2020: 44.6% 

- FY2021: 43.8% 

- FY2022: 41.6% 

- FY2023: 43.2% 

- FY2024: 44.2% 

- FY2025: 44.4% 

## Owner memo

Memo as of 2026-10-16T08:06:05.509Z.

### How it makes money

Operates in furnishings, fixtures & appliances; annual sales are USD 7.5 billion.

- Source: https://www.sec.gov/Archives/edgar/data/1206264/000120626426000015/sgi-20251231.htm (filed 2026-02-27); FY2025: revenue 7476500000; grossProfit 3315900000; margin = grossProfit / revenue.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16); SGI.US: Somnigroup International Inc., together with its subsidiaries, designs, manufactures, distributes, and retails bedding products in the United States and internationally. It provides mattresses, foundations and adjustable foundations, and adjustable bases, as well as other products comprising pillows and other accessories under the Tempur-Pedic, Sealy, Stearns & Foster, and Sleepy's brands. The company operates a portfolio of retail brands, including Mattress Firm, Dreams, Tempur-Pedic retail stores, and SOVA; and licenses Sealy, Tempur, and Stearns & Foster brands, as well as technology and trademarks to other manufacturers. It sells its products through company-owned stores, online, and call centers; and third-party retailers, including third party distribution, hospitality, and healthcare. The company was formerly known as Tempur Sealy International, Inc. and changed its name to Somnigroup International Inc. in February 2025. The company was founded in 1846 and is based in Dallas, Texas.

### Why customers stay

Margins ranged from 43.2% to 44.4% during 2023–25; it earns 19.8% on its capital.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-27); FY2023: grossProfit / revenue = 43.2%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-27); FY2024: grossProfit / revenue = 44.2%.

- Source: https://www.sec.gov/Archives/edgar/data/1206264/000120626426000015/sgi-20251231.htm (filed 2026-02-27); FY2025: grossProfit / revenue = 44.4%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-27); 10-year return on capital observations [[2016,-0.007516535042310884],[2017,0.2119914638576099],[2018,0.18413695889414333],[2019,0.2016142804563857],[2020,0.2991527674405642],[2021,0.3986133457017928],[2022,0.2438647073718164],[2023,0.19525857688602752],[2024,0.12619362753674798],[2025,0.11883957247321245]]; median 0.19843642867120662. ROIC follows the displayed moat series; financial companies use return on tangible equity.

### Where the cash goes

Earns over 100% on new investment; paid dividends in 5 of 8 years.

- Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001206264.json#0001206264-20-000079 (filed 2026-02-27); FY2017: growth capex 0; upkeep 66600000; cash acquisitions 0; owner earnings 178800000. Growth capex plus acquisitions / owner earnings = 0.

- Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001206264.json#0001206264-21-000053 (filed 2026-02-27); FY2018: growth capex 0; upkeep 73600000; cash acquisitions 0; owner earnings 138800000. Growth capex plus acquisitions / owner earnings = 0.

- Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001206264.json#0001206264-22-000057 (filed 2026-02-27); FY2019: growth capex 0; upkeep 88200000; cash acquisitions 17100000; owner earnings 217800000. Growth capex plus acquisitions / owner earnings = 0.07851239669421488.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-27); FY2020: growth capex 13300000; upkeep 98000000; cash acquisitions 41200000; owner earnings 348800000. Growth capex plus acquisitions / owner earnings = 0.15625.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-27); FY2021: growth capex 10100000; upkeep 113200000; cash acquisitions 432800000; owner earnings 624500000. Growth capex plus acquisitions / owner earnings = 0.7092073658927142.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-27); FY2022: growth capex 0; upkeep 306500000; cash acquisitions 0; owner earnings 276300000. Growth capex plus acquisitions / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-27); FY2023: growth capex 964566.5879726708; upkeep 184435433.41202733; cash acquisitions 3000000; owner earnings 318964566.58797264. Growth capex plus acquisitions / owner earnings = 0.012429489050719418.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-27); FY2024: growth capex 0; upkeep 97300000; cash acquisitions 0; owner earnings 452100000. Growth capex plus acquisitions / owner earnings = 0.

- Source: https://www.sec.gov/Archives/edgar/data/1206264/000120626426000015/sgi-20251231.htm (filed 2026-02-27); FY2025: growth capex 0; upkeep 166900000; cash acquisitions 2824500000; owner earnings 466700000. Growth capex plus acquisitions / owner earnings = 6.052067709449325.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-27); Incremental return on capital 1.1472797596081508, from the economics test's unchanged annual inputs.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-27); Dividend observations: [[2016,0],[2017,0],[2020,0],[2021,63100000],[2022,70500000],[2023,77700000],[2024,92700000],[2025,127400000]]. Zero only counted when supported by a complete cash-flow statement.

- Source: https://www.sec.gov/Archives/edgar/data/1206264/000120626426000015/sgi-20251231.htm (filed 2026-02-27); FY2025: cash repurchases 132400000 USD.

### Are managers owners

Insiders own 3.1% of the company.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16); SGI.US SharesStats.PercentInsiders = 3.102 percentage points; cache date 2026-10-16.

### What could break it

These products are dependent on components supply chains originating in China.

- Source: https://www.sec.gov/Archives/edgar/data/1206264/000120626426000015/sgi-20251231.htm (filed 2026-02-27); These are purchased under supply agreements from a limited number of key suppliers. These products are dependent on components supply chains originating in China. We believe over time that sufficient alternate sources of supply for the same or similar components will be available outside of China from our current or alternate suppliers.

### What the price says

The price assumes cash profits grow 10.9% yearly over ten years.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-27); Ten-year compound average after fade. Initial solved rate 0.1446545758657387. Price 64.78; FX 1; discount 0.1; same standard ten-year fade to terminal 0.03. FY2015 owner earnings/share -0.37481629392971244 → FY2025 2.230879541108987. Closing-price date 2026-10-15.

## Monthly share-price history (USD per share)

- 2016-10: $54.07 per share

- 2016-11: $63.30 per share

- 2016-12: $68.28 per share

- 2017-01: $43.00 per share

- 2017-02: $46.19 per share

- 2017-03: $46.46 per share

- 2017-04: $46.95 per share

- 2017-05: $46.44 per share

- 2017-06: $53.39 per share

- 2017-07: $57.67 per share

- 2017-08: $61.90 per share

- 2017-09: $64.52 per share

- 2017-10: $65.37 per share

- 2017-11: $57.91 per share

- 2017-12: $62.69 per share

- 2018-01: $59.64 per share

- 2018-02: $49.43 per share

- 2018-03: $45.29 per share

- 2018-04: $44.75 per share

- 2018-05: $46.13 per share

- 2018-06: $48.05 per share

- 2018-07: $48.87 per share

- 2018-08: $55.39 per share

- 2018-09: $52.90 per share

- 2018-10: $46.21 per share

- 2018-11: $50.98 per share

- 2018-12: $41.40 per share

- 2019-01: $53.02 per share

- 2019-02: $58.21 per share

- 2019-03: $57.67 per share

- 2019-04: $61.40 per share

- 2019-05: $63.81 per share

- 2019-06: $73.37 per share

- 2019-07: $80.22 per share

- 2019-08: $77.12 per share

- 2019-09: $77.20 per share

- 2019-10: $90.95 per share

- 2019-11: $84.88 per share

- 2019-12: $87.06 per share

- 2020-01: $91.62 per share

- 2020-02: $74.75 per share

- 2020-03: $43.71 per share

- 2020-04: $53.75 per share

- 2020-05: $65.23 per share

- 2020-06: $71.95 per share

- 2020-07: $80.95 per share

- 2020-08: $85.54 per share

- 2020-09: $89.19 per share

- 2020-10: $89.00 per share

- 2020-11: $25.19 per share

- 2020-12: $27.00 per share

- 2021-01: $26.40 per share

- 2021-02: $33.41 per share

- 2021-03: $36.56 per share

- 2021-04: $38.14 per share

- 2021-05: $38.50 per share

- 2021-06: $39.19 per share

- 2021-07: $43.27 per share

- 2021-08: $44.70 per share

- 2021-09: $46.41 per share

- 2021-10: $44.47 per share

- 2021-11: $42.84 per share

- 2021-12: $47.03 per share

- 2022-01: $39.81 per share

- 2022-02: $33.01 per share

- 2022-03: $27.92 per share

- 2022-04: $27.11 per share

- 2022-05: $26.37 per share

- 2022-06: $21.37 per share

- 2022-07: $27.48 per share

- 2022-08: $25.01 per share

- 2022-09: $24.14 per share

- 2022-10: $26.89 per share

- 2022-11: $31.77 per share

- 2022-12: $34.33 per share

- 2023-01: $40.75 per share

- 2023-02: $42.74 per share

- 2023-03: $39.49 per share

- 2023-04: $37.47 per share

- 2023-05: $35.64 per share

- 2023-06: $40.07 per share

- 2023-07: $44.63 per share

- 2023-08: $46.72 per share

- 2023-09: $43.34 per share

- 2023-10: $39.93 per share

- 2023-11: $40.32 per share

- 2023-12: $50.97 per share

- 2024-01: $49.89 per share

- 2024-02: $54.47 per share

- 2024-03: $56.82 per share

- 2024-04: $50.06 per share

- 2024-05: $51.36 per share

- 2024-06: $47.34 per share

- 2024-07: $52.35 per share

- 2024-08: $52.43 per share

- 2024-09: $54.60 per share

- 2024-10: $47.91 per share

- 2024-11: $55.98 per share

- 2024-12: $56.69 per share

- 2025-01: $63.14 per share

- 2025-02: $63.88 per share

- 2025-03: $59.88 per share

- 2025-04: $61.06 per share

- 2025-05: $65.06 per share

- 2025-06: $68.05 per share

- 2025-07: $72.38 per share

- 2025-08: $83.95 per share

- 2025-09: $84.33 per share

- 2025-10: $79.34 per share

- 2025-11: $91.52 per share

- 2025-12: $89.28 per share

- 2026-01: $87.85 per share

- 2026-02: $89.51 per share

- 2026-03: $73.92 per share

- 2026-04: $75.86 per share

- 2026-05: $70.81 per share

- 2026-06: $78.40 per share

- 2026-07: $65.33 per share

- 2026-08: $64.75 per share

- 2026-09: $62.11 per share

- 2026-10: $64.78 per share

## Annual estimated value (USD per share)

- FY2019: low $9.80 per share, central $13.99 per share, high $16.43 per share

- FY2020: low $15.59 per share, central $22.27 per share, high $26.16 per share

- FY2021: low $24.00 per share, central $33.86 per share, high $39.60 per share

- FY2022: low $26.02 per share, central $37.17 per share, high $43.66 per share

- FY2023: low $26.48 per share, central $37.83 per share, high $44.44 per share

- FY2024: low $34.60 per share, central $49.38 per share, high $57.98 per share

- FY2025: low $31.46 per share, central $44.95 per share, high $52.80 per share

Historical values use today's bond yield for every fiscal year

Historical values use today's FX rate into trading currency for every fiscal year

Historical values use current restated fundamentals and current commodity classification; they are not point-in-time estimates

## Sources

[Original 10-K filing](https://www.sec.gov/Archives/edgar/data/1206264/000120626426000015/sgi-20251231.htm); period 2025-12-31, filed 2026-02-27.

Estimates depend on assumptions and are not guarantees or investment advice. Underlying data remains subject to its source licenses; public reading does not grant bulk redistribution rights.