SGI
Somnigroup International Inc
$66.89
Platform & Compounding FCF
85%
Two-stage FCF DCF
Strong
·
Conviction
Overvalued
Trading 139.2% above fair value
You pay
$66.89
Bear
$3.59
Fair
$27.96
Bull
$49.97
Bear
$3.59
-94.6%
4% stage 1 growth, 11% discount
Fair
$27.96
-58.2%
7% stage 1 growth, 11% discount
Bull
$49.97
-25.3%
9% stage 1 growth, 11% discount
Key Value Driver
FCF growth rate (7% base case)
Terminal Value % of EV
36%
Implied Market Multiple
36.8x
Summary
Our base-case estimate uses a two-stage discounted cash flow model based on free cash flow. 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 $27.96 per share.
Warnings
Wall Street's average price target is $99.00 (from 11 analysts). Our estimate is 90% below the consensus -- consider that gap carefully.
Key Risks
- P/E alone misleads — earnings depressed by growth investment
- Cyclical or commodity businesses may be misclassified as platforms
- Terminal value dominance suggests sensitivity to long-run assumptions