Sotera Health (SHC) AI Stock Analysis

• Market Cap: $4.49B
• Dividend Yield: N/A
• Average Volume (3M): 2.24M
• Price to Earnings (P/E): 188.9
• Beta (1Y): 0.97
• Revenue Growth: 2.40%
• EPS Growth: -40.03%
• Country: US
• Employees: 3,000
• Sector: Healthcare
• Sector Strength: 45
• Industry: Medical - Diagnostics & Research
• EPS (TTM): 0.20
• Shares Outstanding: 284,046,600
• 10 Day Avg. Volume: 1,763,642
• 30 Day Avg. Volume: 2,239,617
• PEG Ratio: -7.84
• Price to Book (P/B): 9.55
• Price to Sales (P/S): 3.52
• P/FCF Ratio: 85.79
• Enterprise Value/Market Cap: 1.16
• Enterprise Value/Revenue: 4.62
• Enterprise Value/Gross Profit: 8.32
• Enterprise Value/Ebitda: 12.49
• 1Y Price Target: $16.00
• Price Target Upside: 1.20% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 4

• Rating: 66 Neutral
• Price Target: $16.50 ▲(4.36% Upside)

Sotera Health's overall stock score is driven by a positive earnings call and strong technical indicators, indicating potential growth. However, high valuation and financial leverage pose risks. The company's ability to manage debt and improve profitability will be crucial for future performance.

Positive Factors

Revenue Growth

The consistent revenue growth reflects strong demand for Sotera Health's services, reinforcing its market position and potential for future expansion.

Cash Flow Generation

Robust cash flow generation enhances financial stability and provides flexibility for strategic investments and debt management.

Sterigenics Segment Growth

The strong performance in the Sterigenics segment underscores the company's ability to capitalize on increased demand and expand its service offerings.

Negative Factors

High Leverage

Excessive leverage can strain financial resources and limit the company's ability to invest in growth opportunities, posing a risk to long-term stability.

Nelson Labs Revenue Decline

The decline in Nelson Labs' revenue highlights challenges in maintaining growth across all segments, potentially impacting overall profitability.

Legal Settlement Impact

The legal settlement affects net income and may lead to reputational risks, impacting the company's financial performance and stakeholder trust.

Sotera Health Business Overview & Revenue Model

Company Description

Sotera Health Company provides sterilization, and lab testing and advisory services in the United States, Canada, Europe, and internationally. The company's sterilization services include gamma and electron beam irradiation, and EO processing; Nelson Labs comprise microbiological and analytical chemistry testing; and advisory services for medical device and biopharmaceutical industries. It serves medical devices; pharmaceuticals; food and agricultural products; and commercial, advanced, and specialty application industries. The company was formerly known as Sotera Health Topco, Inc. and changed its name to Sotera Health Company in October 2020. Sotera Health Company was incorporated in 2017 and is headquartered in Broadview Heights, Ohio.

How the Company Makes Money

Sotera Health generates revenue primarily through its sterilization and laboratory services. The company charges clients for the use of its specialized sterilization facilities and equipment, as well as for laboratory testing and quality assurance services. Key revenue streams include contracts with healthcare manufacturers for sterilization processes, testing services for medical products, and partnerships with pharmaceutical companies for compliance testing. Additionally, SHC benefits from long-term contracts and relationships with major clients, which provide a stable revenue base. Strategic collaborations with industry partners further enhance its market reach and operational efficiency, contributing to overall earnings.

Sotera Health Financial Statement Overview

Summary

Sotera Health shows moderate financial health with stable revenue growth and efficient cost management. However, high leverage poses a financial risk, and profitability metrics indicate room for improvement. Cash flow generation is strong, but the company needs to enhance its cash conversion efficiency and reduce reliance on debt.

Income Statement

Sotera Health's income statement shows moderate revenue growth with a TTM increase of 1.6%. The gross profit margin remains stable around 55%, indicating efficient cost management. However, the net profit margin is low at 2.1% TTM, reflecting challenges in converting revenue into profit. EBIT and EBITDA margins are healthy, but have shown a slight decline in recent periods, suggesting potential operational inefficiencies.

Balance Sheet

The balance sheet reveals a high debt-to-equity ratio of 4.60 TTM, indicating significant leverage and potential financial risk. Return on equity is modest at 5.3% TTM, suggesting limited profitability relative to shareholder equity. The equity ratio is low, reflecting a reliance on debt financing over equity.

Cash Flow

Cash flow analysis shows strong free cash flow growth of 44.5% TTM, indicating improved cash generation. The operating cash flow to net income ratio is slightly above 1, suggesting adequate cash flow coverage. However, the free cash flow to net income ratio is moderate at 0.41, indicating room for improvement in cash conversion efficiency.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	1.12B	1.10B	1.05B	1.00B	931.48M	818.16M
Gross Profit	624.44M	602.29M	577.16M	557.00M	518.67M	443.57M
EBITDA	415.70M	442.20M	406.83M	-17.41M	400.81M	319.96M
Net Income	24.02M	44.40M	51.38M	-233.57M	116.88M	-38.62M
Balance Sheet
Total Assets	3.22B	3.07B	3.13B	3.12B	2.79B	2.76B
Cash, Cash Equivalents and Short-Term Investments	332.44M	277.24M	296.41M	395.21M	106.92M	102.45M
Total Debt	2.35B	2.35B	2.33B	2.03B	1.83B	1.91B
Total Liabilities	2.71B	2.67B	2.69B	2.77B	2.20B	2.31B
Stockholders Equity	511.28M	404.91M	443.73M	350.24M	586.10M	452.30M
Cash Flow
Free Cash Flow	110.85M	45.09M	-362.71M	95.58M	179.38M	67.08M
Operating Cash Flow	264.26M	224.16M	-147.73M	277.96M	281.55M	120.58M
Investing Cash Flow	-153.33M	-179.00M	-214.91M	-181.90M	-159.83M	-158.69M
Financing Cash Flow	-22.37M	-50.56M	265.96M	197.76M	-117.29M	73.43M

Sotera Health Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 15.81
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SHC, the sentiment is Positive. The current price of 15.81 is below the 20-day moving average (MA) of 15.94, above the 50-day MA of 14.57, and above the 200-day MA of 12.89, indicating a neutral trend. The MACD of 0.25 indicates Positive momentum. The RSI at 53.47 is Neutral, neither overbought nor oversold. The STOCH value of 29.15 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for SHC.

Sotera Health Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
DGX	73 Outperform	21.13B	22.17	13.13%	1.64%	12.58%	13.00%
QGEN	70 Outperform	9.51B	25.71	10.65%	2.86%	5.15%	412.41%
SHC	66 Neutral	$4.49B	188.89	5.14%	―	2.40%	-40.03%
ILMN	62 Neutral	14.09B	11.61	48.27%	―	-3.32%	―
EXAS	53 Neutral	10.14B	-9.88	-40.71%	―	12.56%	-464.28%
CRL	51 Neutral	7.31B	-112.15	-2.06%	―	-1.21%	-115.44%
Sector *	51 Neutral	$7.86B	-0.30	-43.30%	2.27%	22.53%	-2.21%

Sotera Health Corporate Events

Sotera Health Shareholders Sell 20 Million Shares

On September 5, 2025, Sotera Health Company witnessed the sale of 20,000,000 shares of its common stock by certain stockholders to Goldman Sachs & Co. LLC, under an underwriting agreement. The company itself did not sell any shares and will not benefit financially from this transaction, which may affect the stockholders’ equity distribution but not the company’s direct financial standing.

Sotera Health Subsidiary Settles $34M Ethylene Oxide Claims

On July 23, 2025, Sterigenics U.S., LLC, a subsidiary of Sotera Health Company, agreed to a $34 million settlement to resolve 129 ethylene oxide claims related to its former Willowbrook, Illinois facility. This settlement, which includes claims set for trials in late 2025 and early 2026, is contingent upon several conditions, including full claimant participation and court approval. Sterigenics denies any liability, emphasizing that the settlement is not an admission of fault or safety hazards posed by the facility’s emissions.