Is SGI a high-quality business?

AlphaMadera's AlphaQuality grade scores Somnigroup International Inc on six pillars — profitability, capital efficiency, balance-sheet strength, growth durability, cash generation, and shareholder yield. The composite letter grade reflects how SGI compares to a Buffett-style quality bar.

What is Somnigroup International Inc's AlphaQuality grade?

AlphaQuality assigns a letter grade (A through F) to SGI based on a six-pillar quantitative model. The live page shows the composite grade plus each pillar's individual score with the underlying metrics.

What makes SGI a quality stock?

AlphaQuality looks at return on capital, free-cash-flow margins, debt-to-equity, revenue stability, dividend and buyback policy, and operating-margin trend. Stocks scoring well across all six pillars earn higher grades — the methodology favors compounders over cyclicals.

SGI - Somnigroup International Inc

Price: -- -- | CONSENSUS: Buy DETAILS | PRICE TARGET: $99.00 DETAILS

AlphaQuality

Quantitative six-pillar business-quality grade

Platform & Compounding FCF

AlphaQuality — archetype-weighted quantitative grade

C 53.0 / 100 composite

Composite Grade

Composite of six pillars weighted for platform & compounding fcf businesses. Purely quantitative — no stock price or analyst input.

Profitability

Weight: 25%

D- 29.6

5yr Avg ROIC 5.0% 35/100
Operating Margin Trend -1.16 pp/yr 17/100

Capital Efficiency

Weight: 15%

B- 69.0

5yr Avg ROE 14.3% 78/100
5yr Share-Count CAGR 0.6% 53/100

Growth Quality

Weight: 25%

C 53.1

5yr Revenue CAGR 11.0% 82/100
5yr EPS CAGR -11.9% 0/100
Revenue-Growth Years (5) 4/5 80/100

Cash Generation

Weight: 20%

B+ 79.3

5yr FCF Margin 8.3% 63/100
5yr FCF/NI Conversion 1.06x 99/100

Balance Sheet

Weight: 10%

F 25.7

Net Debt / EBITDA 7.81x 0/100
Interest Coverage (EBIT/Int) 2.80x 42/100
Altman Z-Score 2.38 53/100

Stability

Weight: 5%

B 69.7

EPS Volatility (σ/μ) 0.23 66/100
Piotroski F-Score 6 67/100
Negative-Revenue Years (5) 1/5 80/100

4 of 5 gurus held; 1 added; 3 trimmed; 2 full exits.

Holders: 4 -1
Avg Δ position: +110.1%
New buys: 0
Full exits: 2

Cooperman sold -100%
Laffont sold -100%
Wood increased +508%

How this is calculated

AlphaQuality grades six pillars from 0-100 and weights each by archetype:

Profitability (25%) — 5yr Avg ROIC, Operating Margin Trend
Capital Efficiency (15%) — 5yr Avg ROE, 5yr Share-Count CAGR
Growth Quality (25%) — 5yr Revenue CAGR, 5yr EPS CAGR, Revenue-Growth Years (5)
Cash Generation (20%) — 5yr FCF Margin, 5yr FCF/NI Conversion
Balance Sheet (10%) — Net Debt / EBITDA, Interest Coverage (EBIT/Int), Altman Z-Score
Stability (5%) — EPS Volatility (σ/μ), Piotroski F-Score, Negative-Revenue Years (5)

We deliberately ignore stock price, analyst targets, and consensus ratings so the grade is suitable for backtesting forward returns. A minimum of 5 fiscal years of audited statements is required; distressed and highly leveraged infrastructure businesses are declared ungradable rather than forced into a numeric score.