Latest news with #Somnigroup
Yahoo
06-08-2025
- Business
- Yahoo
What To Expect From Somnigroup's (SGI) Q2 Earnings
Bedding manufacturer Somnigroup (NYSE:SGI) will be reporting results this Thursday before market open. Here's what you need to know. Somnigroup missed analysts' revenue expectations by 1.8% last quarter, reporting revenues of $1.60 billion, up 34.9% year on year. It was a slower quarter for the company, with full-year EPS guidance missing analysts' expectations significantly and a miss of analysts' Direct revenue estimates. Is Somnigroup a buy or sell going into earnings? Read our full analysis here, it's free. This quarter, analysts are expecting Somnigroup's revenue to grow 53.4% year on year to $1.89 billion, a reversal from the 2.8% decrease it recorded in the same quarter last year. Adjusted earnings are expected to come in at $0.51 per share. The majority of analysts covering the company have reconfirmed their estimates over the last 30 days, suggesting they anticipate the business to stay the course heading into earnings. Somnigroup has missed Wall Street's revenue estimates six times over the last two years. Looking at Somnigroup's peers in the home furnishings segment, some have already reported their Q2 results, giving us a hint as to what we can expect. Purple's revenues decreased 12.6% year on year, meeting analysts' expectations, and Mohawk Industries reported flat revenue, topping estimates by 2.2%. Purple traded down 4% following the results while Mohawk Industries was up 4.2%. Read our full analysis of Purple's results here and Mohawk Industries's results here. Investors in the home furnishings segment have had steady hands going into earnings, with share prices up 1.6% on average over the last month. Somnigroup is up 3.7% during the same time and is heading into earnings with an average analyst price target of $76.11 (compared to the current share price of $74.59). When a company has more cash than it knows what to do with, buying back its own shares can make a lot of sense–as long as the price is right. Luckily, we've found one, a low-priced stock that is gushing free cash flow AND buying back shares. Click here to claim your Special Free Report on a fallen angel growth story that is already recovering from a setback. StockStory is growing and hiring equity analyst and marketing roles. Are you a 0 to 1 builder passionate about the markets and AI? See the open roles here.
Yahoo
17-07-2025
- Business
- Yahoo
Somnigroup International Inc. (SGI): A Bull Case Theory
We came across a bullish thesis on Somnigroup International Inc. on Vestrule's Substack by Ben Tewey. In this article, we will summarize the bulls' thesis on SGI. Somnigroup International Inc.'s share was trading at $71.17 as of July 11th. SGI's trailing and forward P/E were 45.62 and 28.49 respectively according to Yahoo Finance. antonio-caverzan-D1YruV0KUDw-unsplash Somnigroup (SGI), the vertically integrated mattress giant formed from the TPX-Mattress Firm merger, represents a uniquely advantaged leader in a structurally improving industry. With $7.6B in 2024 pro forma revenue, SGI dominates both manufacturing and retail, supported by brands like Tempur-Pedic, Sealy, and Stearns & Foster, and a vast network of 2,800+ stores. The merger gives SGI unrivaled control over distribution and an ability to capture margin across the value chain. Despite a severe multi-year downturn in mattress demand, the company is positioned to benefit from trough-on-trough dynamics and pent-up replacement demand, setting the stage for a multi-year recovery. Trading at just 15x normalized free cash flow and 9.5x EBITDA, the stock does not yet reflect its strategic advantages, normalized earnings power, or significant synergy potential. CEO Scott Thompson, with a track record of aggressive and effective execution, is expected to leverage SGI's unmatched retail scale, share gain potential, and a refreshed product lineup—particularly the new Sealy Posturepedic line—to drive $335M in total synergies, well above guided figures. SGI is poised to grow EPS at ~18% annually, with a clear path to $5.39 EPS by 2029 and a stock price target of $121+, implying a 19% IRR. Further tailwinds include increased control over pricing, faster innovation from proprietary POS data, and the potential to force weakened competitors like Serta Simmons and Purple into distressed positions. With strategic moat, rising DTC mix, and unmatched scale in advertising and R&D, SGI offers a dominant platform at an inflection point—both industry-wide and operationally. Previously we covered a on Driven Brands Holdings Inc. (DRVN) by Ben Tewey in March 2025, which highlighted the company's focus on Take 5 Oil Change, debt reduction, and potential divestiture of its car wash segment. The company's stock price has appreciated approximately by 4% since our coverage. Ben Tewey shares a similar analytical style in his thesis on Somnigroup but emphasizes vertical integration and industry consolidation. Somnigroup International Inc. is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 61 hedge fund portfolios held SGI at the end of the first quarter which was 58 in the previous quarter. While we acknowledge the potential of SGI as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock. READ NEXT: 8 Best Wide Moat Stocks to Buy Now and 30 Most Important AI Stocks According to BlackRock. Disclosure: None. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
10-06-2025
- Business
- Yahoo
1 Safe-and-Steady Stock to Target This Week and 2 to Brush Off
Stability is great, but low-volatility stocks may struggle to deliver market-beating returns over time as they sometimes underperform during bull markets. Luckily for you, StockStory helps you navigate which companies are truly worth holding. That said, here is one low-volatility stock providing safe-and-steady growth and two that may not deliver the returns you need. Rolling One-Year Beta: 0.73 Operating as Spectrum, Charter (NASDAQ:CHTR) is a leading telecommunications company offering cable television, high-speed internet, and voice services across the United States. Why Do We Think Twice About CHTR? Number of internet subscribers has disappointed over the past two years, indicating weak demand for its offerings Demand will likely be weak over the next 12 months as Wall Street expects flat revenue ROIC of 9.6% reflects management's challenges in identifying attractive investment opportunities Charter is trading at $391.09 per share, or 10.2x forward P/E. Check out our free in-depth research report to learn more about why CHTR doesn't pass our bar. Rolling One-Year Beta: 0.88 Established through the merger of Tempur-Pedic and Sealy in 2012, Somnigroup (NYSE:SGI) is a bedding manufacturer known for its innovative memory foam mattresses and sleep products Why Does SGI Fall Short? Lackluster 4.6% annual revenue growth over the last two years indicates the company is losing ground to competitors Waning returns on capital imply its previous profit engines are losing steam High net-debt-to-EBITDA ratio of 5× could force the company to raise capital at unfavorable terms if market conditions deteriorate Somnigroup's stock price of $65.84 implies a valuation ratio of 22.9x forward P/E. To fully understand why you should be careful with SGI, check out our full research report (it's free). Rolling One-Year Beta: 0.89 Founded in 1949, Grand Canyon Education (NASDAQ:LOPE) is an educational services provider known for its operation at Grand Canyon University. Why Do We Like LOPE? Excellent operating margin of 26.5% highlights the efficiency of its business model ROIC punches in at 30.2%, illustrating management's expertise in identifying profitable investments, and its returns are growing as it capitalizes on even better market opportunities At $185.13 per share, Grand Canyon Education trades at 20.8x forward P/E. Is now the right time to buy? See for yourself in our comprehensive research report, it's free. Market indices reached historic highs following Donald Trump's presidential victory in November 2024, but the outlook for 2025 is clouded by new trade policies that could impact business confidence and growth. While this has caused many investors to adopt a "fearful" wait-and-see approach, we're leaning into our best ideas that can grow regardless of the political or macroeconomic climate. Take advantage of Mr. Market by checking out our Top 9 Market-Beating Stocks. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025). Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-small-cap company Exlservice (+354% five-year return). Find your next big winner with StockStory today for free. Sign in to access your portfolio
Yahoo
06-06-2025
- Business
- Yahoo
SGI Q1 Earnings Call: Revenue Miss, Guidance Cut, and Tariff Mitigation Plans Detailed
Bedding manufacturer Somnigroup (NYSE:SGI) missed Wall Street's revenue expectations in Q1 CY2025, but sales rose 34.9% year on year to $1.6 billion. Its non-GAAP EPS of $0.49 per share was 5.1% above analysts' consensus estimates. Is now the time to buy SGI? Find out in our full research report (it's free). Revenue: $1.6 billion (34.9% year-on-year growth) Adjusted EPS: $0.49 vs analyst estimates of $0.47 (5.1% beat) Adjusted Operating Income: $182.8 million vs analyst estimates of $185.4 million (11.4% margin, 1.4% miss) Management lowered its full-year Adjusted EPS guidance to $2.47 at the midpoint, a 11.6% decrease Operating Margin: 0.8%, down from 11.1% in the same quarter last year Market Capitalization: $13.6 billion Somnigroup's first quarter performance was shaped by the initial integration of Mattress Firm and the ongoing launch of new product lines, particularly the Sealy Posturepedic collection in North America. CEO Scott Thompson cited 'continued strong performance in our international business' and highlighted solid mid-single-digit sales growth in key markets, despite the impact of foreign exchange. Management also addressed weaker-than-expected U.S. consumer demand over the President's Day period and a challenging market backdrop. The company's operational focus included expanding distribution, accelerating private label initiatives, and streamlining logistics, all of which were intended to counteract industry headwinds and drive market share gains. Looking forward, Somnigroup's revised outlook reflects lowered expectations for the U.S. bedding market, with management now projecting a mid-single-digit industry decline for the year. CFO Bhaskar Rao attributed the guidance cut primarily to a 'rapid change in consumer confidence or sentiment in the U.S.,' describing it as volatile and policy-driven. The company plans to offset new tariff costs by combining supplier negotiations and price increases, which are set to take effect in the third quarter. Management emphasized upcoming marketing campaigns and the ongoing rollout of the Sealy collection as potential drivers for a modest second-half improvement, though they cautioned that overall industry demand is likely to remain subdued. Management discussed the integration of Mattress Firm, evolving market conditions, and the company's response to tariff developments as major themes impacting the quarter. International business momentum: The international segment, led by the Tempur brand, delivered mid-single-digit sales growth on a reported basis and high single digits in constant currency. Management highlighted the success of new Tempur products and an expanded price range that increased distribution opportunities and market reach. Sealy Posturepedic launch progress: The comprehensive rebranding and rollout of the Sealy Posturepedic collection in North America was a major operational focus. Early locations showed encouraging results, and the product is expected to be widely available by Memorial Day, supported by a national advertising campaign. Mattress Firm integration and synergies: Somnigroup completed the first phase of integrating Mattress Firm, focusing on leadership alignment, cost reduction, and logistics optimization. The company increased its near-term synergy target for 2025 to $15 million and is leveraging Mattress Firm's home delivery network for enhanced operational efficiency. Tariff mitigation strategy: Facing new tariffs, Somnigroup acted to reduce exposure through supplier changes and cost-sharing arrangements. The remaining impact will be addressed by a 2% price increase in North America, effective in the third quarter, with management expecting the combination of actions to fully offset the tariff cost. Advertising and merchandising changes: Somnigroup is doubling down on advertising scale, aiming for more effective campaigns by aligning messaging and leveraging buying power. Mattress Firm is also expanding its assortment through new vendor partnerships and increasing the share of Tempur Sealy-manufactured products, including an expanded private label offering. Somnigroup's updated outlook centers on cautious U.S. consumer sentiment, cost pressures from tariffs, and the pace of synergy realization from the Mattress Firm acquisition. Consumer confidence uncertainty: Management attributed the lower guidance to a double-digit decline in U.S. consumer confidence, which it sees as the main determinant of short-term demand. While this index is considered highly volatile and policy-sensitive, any recovery in sentiment could improve sales trends. Tariff pass-through and cost management: The company expects to manage increased tariff-related costs by shifting suppliers and raising prices. While these actions are intended to neutralize the margin impact, there is a lag in implementation, leading to a temporary headwind in the second quarter. New product and marketing initiatives: The ongoing rollout of the Sealy Posturepedic collection and the reimagined Mattress Firm advertising campaign are expected to drive incremental demand in the second half. Management is also focused on merchandising changes and expanded vendor partnerships to enhance store traffic and average order value. In the coming quarters, the StockStory team will be watching (1) the pace of synergy realization and operational improvements following the Mattress Firm acquisition, (2) the market response to new product launches and expanded vendor partnerships, and (3) the effectiveness of tariff mitigation and price increase strategies. Progress on these fronts, as well as shifts in U.S. consumer confidence, will be key indicators of future performance. Somnigroup currently trades at a forward P/E ratio of 22.7×. Should you double down or take your chips? See for yourself in our full research report (it's free). Market indices reached historic highs following Donald Trump's presidential victory in November 2024, but the outlook for 2025 is clouded by new trade policies that could impact business confidence and growth. While this has caused many investors to adopt a "fearful" wait-and-see approach, we're leaning into our best ideas that can grow regardless of the political or macroeconomic climate. Take advantage of Mr. Market by checking out our Top 9 Market-Beating Stocks. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025). Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-small-cap company Exlservice (+354% five-year return). Find your next big winner with StockStory today.
Yahoo
27-05-2025
- Business
- Yahoo
Somnigroup (SGI): Buy, Sell, or Hold Post Q1 Earnings?
Somnigroup currently trades at $65.70 and has been a dream stock for shareholders. It's returned 293% since May 2020, more than tripling the S&P 500's 90.8% gain. The company has also beaten the index over the past six months as its stock price is up 17.7%. Is there a buying opportunity in Somnigroup, or does it present a risk to your portfolio? Dive into our full research report to see our analyst team's opinion, it's free. We're happy investors have made money, but we're swiping left on Somnigroup for now. Here are three reasons why there are better opportunities than SGI and a stock we'd rather own. A company's long-term performance is an indicator of its overall quality. Any business can have short-term success, but a top-tier one grows for years. Over the last five years, Somnigroup grew its sales at a 10.6% annual rate. Although this growth is acceptable on an absolute basis, it fell short of our standards for the consumer discretionary sector, which enjoys a number of secular tailwinds. ROIC, or return on invested capital, is a metric showing how much operating profit a company generates relative to the money it has raised (debt and equity). We like to invest in businesses with high returns, but the trend in a company's ROIC is what often surprises the market and moves the stock price. Over the last few years, Somnigroup's ROIC has unfortunately decreased significantly. We like what management has done in the past, but its declining returns are perhaps a symptom of fewer profitable growth opportunities. Debt is a tool that can boost company returns but presents risks if used irresponsibly. As long-term investors, we aim to avoid companies taking excessive advantage of this instrument because it could lead to insolvency. Somnigroup's $5.03 billion of debt exceeds the $111.1 million of cash on its balance sheet. Furthermore, its 5× net-debt-to-EBITDA ratio (based on its EBITDA of $973.5 million over the last 12 months) shows the company is overleveraged. At this level of debt, incremental borrowing becomes increasingly expensive and credit agencies could downgrade the company's rating if profitability falls. Somnigroup could also be backed into a corner if the market turns unexpectedly – a situation we seek to avoid as investors in high-quality companies. We hope Somnigroup can improve its balance sheet and remain cautious until it increases its profitability or pays down its debt. Somnigroup's business quality ultimately falls short of our standards. With its shares topping the market in recent months, the stock trades at 22.2× forward P/E (or $65.70 per share). Investors with a higher risk tolerance might like the company, but we think the potential downside is too great. We're pretty confident there are superior stocks to buy right now. Let us point you toward the Amazon and PayPal of Latin America. The market surged in 2024 and reached record highs after Donald Trump's presidential victory in November, but questions about new economic policies are adding much uncertainty for 2025. While the crowd speculates what might happen next, we're homing in on the companies that can succeed regardless of the political or macroeconomic environment. Put yourself in the driver's seat and build a durable portfolio by checking out our Top 5 Strong Momentum Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025). Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-micro-cap company Tecnoglass (+1,754% five-year return). Find your next big winner with StockStory today. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
