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 11^th. SGI’s trailing and forward P/E were 45.62 and 28.49 respectively according to Yahoo Finance.

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 bullish thesis 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.

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Disclosure: None.