SGI
Somnigroup International Inc
$68.85
Stable Earnings Power
80%
P/Adj-EPS × Normalized Multiple
Moderate
·
Conviction
Overvalued
Trading 23.0% above fair value
You pay
$68.85
Bear
$48.97
Fair
$55.96
Bull
$62.96
Bear
$48.97
-28.9%
$2.83 × 14x P/E
Fair
$55.96
-18.7%
$2.83 × 16x P/E
Bull
$62.96
-8.6%
$2.83 × 18x P/E
Key Value Driver
Normalized P/E multiple (16x base case)
Implied Market Multiple
24.4x
Summary
Our base-case estimate uses a valuation based on adjusted earnings per share and a normalized price-to-earnings multiple. We then blend that result with the average analyst price target of $99.00 from 11 analysts, using a 20% weight on analyst consensus. That produces an estimated intrinsic value of $55.96 per share.
Warnings
The company's reported profits differ from official accounting profits by 54%. Check what costs are being left out of the adjusted number.
Wall Street's average price target is $99.00 (from 11 analysts). Our estimate is 54% below the consensus -- consider that gap carefully.
Key Risks
- Growth DCF inappropriate — terminal value assumptions dominate
- EV/EBITDA misleading for regulated businesses where capex is mandated
- Regulatory risk is a fat tail not visible in normal multiples