Sotera Health (SHC) AI Stock Analysis

• Market Cap: $3.25B
• Dividend Yield: N/A
• Average Volume (3M): 1.29M
• Price to Earnings (P/E): 134.4
• Beta (1Y): 0.85
• Revenue Growth: 2.78%
• EPS Growth: -54.72%
• Country: US
• Employees: 3,000
• Sector: Healthcare
• Sector Strength: 47
• Industry: Medical - Diagnostics & Research
• EPS (TTM): 0.14
• Shares Outstanding: 283,855,070
• 10 Day Avg. Volume: 1,443,346
• 30 Day Avg. Volume: 1,288,056
• PEG Ratio: -2.65
• Price to Book (P/B): 7.51
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 41.43
• Enterprise Value/Market Cap: 1.58
• Enterprise Value/Revenue: 1.16
• Enterprise Value/Gross Profit: 8.43
• Enterprise Value/Ebitda: 2.96
• 1Y Price Target: $14.50
• Price Target Upside: 24.57% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 4

• Rating: 61 Neutral
• Price Target: $12.00 ▲(3.09%Upside)

Sotera Health's overall stock score is primarily influenced by its solid financial performance and positive earnings outlook, despite high leverage and valuation concerns. The technical analysis indicates bearish trends, and the legal settlement poses potential risks, but the company's growth prospects and strategic initiatives offer resilience.

Positive Factors

Regulatory Impact

Nelson volumes are benefiting from new regulatory requirements across various end-markets, including bioprocessing and medtech.

Volume Trends

Management is confident in volume recovery, with volumes stabilizing after pandemic-related volatility and positive trends in bioprocessing, medtech, and general hospital sectors.

Negative Factors

Financial Performance

Unfavorable revisions to EBITDA and increased interest expenses have negated the potential benefits from increased discipline around growth capex.

Revenue Decline

The company faces a significant decline in RCA-related revenue in the first quarter, leading to a solidly negative volume and mix.

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 diverse portfolio of sterilization and lab testing services offered across its three segments: Sterigenics, Nordion, and Nelson Labs. Sterigenics is a major source of income, providing various sterilization methods, including gamma, ethylene oxide, and electron beam, to healthcare manufacturers. Nordion contributes by supplying Cobalt-60, essential for gamma sterilization and radiation therapy. Nelson Labs supports revenue through its comprehensive suite of microbiology testing and laboratory services, catering to healthcare, pharmaceutical, and medical device companies. The company's earnings are bolstered by long-term contracts with clients, strategic partnerships, and its global presence, all contributing to a stable and diversified revenue stream.

Sotera Health Financial Statement Overview

Summary

Sotera Health shows consistent revenue growth and strong operational efficiency with solid EBITDA margins. However, high leverage and fluctuating net profits pose potential risks, despite effective cash flow management.

Income Statement

Sotera Health shows a consistent revenue growth trend with a 7.1% increase from 2023 to TTM and a 4.5% increase from 2022 to 2023. The gross profit margin is stable, averaging around 54% over the periods. However, net profit margin has fluctuated, showing a decline in TTM due to lower net income. EBITDA margin remains robust, indicating strong operational efficiency.

Balance Sheet

The company's balance sheet reveals a high debt-to-equity ratio of 5.67 in TTM, which poses a leverage risk. The equity ratio is relatively low at 13.4%, suggesting limited financial flexibility. Return on equity has decreased, reflecting weaker profitability relative to equity.

Cash Flow

Free cash flow has shown positive growth from 2023 to TTM, indicating efficient capital management. The operating cash flow to net income ratio is favorable, signifying good cash generation relative to earnings. However, fluctuations in capital expenditures impact overall cash flow stability.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	1.11B	1.10B	1.05B	1.00B	931.48M	818.16M
Gross Profit	610.61M	602.29M	577.16M	557.00M	518.67M	443.57M
EBITDA	415.84M	442.20M	406.83M	-17.41M	400.81M	319.96M
Net Income	24.82M	44.40M	51.38M	-233.57M	116.88M	-38.62M
Balance Sheet
Total Assets	3.10B	3.07B	3.13B	3.12B	2.79B	2.76B
Cash, Cash Equivalents and Short-Term Investments	304.39M	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	2.68B	2.67B	2.69B	2.77B	2.20B	2.31B
Stockholders Equity	414.09M	404.91M	443.73M	350.24M	586.10M	452.30M
Cash Flow
Free Cash Flow	75.13M	45.09M	-362.71M	95.58M	179.38M	67.08M
Operating Cash Flow	239.22M	224.16M	-147.73M	277.96M	281.55M	120.58M
Investing Cash Flow	-164.02M	-179.00M	-214.91M	-181.90M	-159.83M	-158.69M
Financing Cash Flow	-15.95M	-50.56M	265.96M	197.76M	-117.29M	73.43M

Sotera Health Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 11.64
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SHC, the sentiment is Neutral. The current price of 11.64 is above the 20-day moving average (MA) of 11.59, below the 50-day MA of 12.01, and below the 200-day MA of 13.25, indicating a neutral trend. The MACD of -0.21 indicates Negative momentum. The RSI at 49.87 is Neutral, neither overbought nor oversold. The STOCH value of 64.59 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for SHC.

Sotera Health Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
HAE	79 Outperform	$3.67B	22.99	18.83%	―	3.95%	44.09%
ICUI	66 Neutral	$3.32B	―	-4.62%	―	7.19%	-56.19%
CRSP	64 Neutral	$4.19B	―	-19.71%	―	-86.13%	-67.29%
IRTC	64 Neutral	$4.56B	―	-111.13%	―	20.54%	25.73%
SHC	61 Neutral	$3.25B	134.41	5.88%	―	2.78%	-54.72%
SGRY	60 Neutral	$2.89B	―	-10.43%	―	13.54%	-30732.00%
Sector *	51 Neutral	$7.55B	0.30	-61.90%	2.27%	17.11%	1.58%

Sotera Health Corporate Events

Sotera Health Elects Directors and Approves Auditor

At its 2025 annual meeting on May 21, Sotera Health Company elected three Class II directors for a three-year term, approved executive compensation, and ratified Ernst & Young LLP as its independent auditor for 2025. These decisions reflect the company’s ongoing governance and operational strategies, potentially impacting its market position and stakeholder confidence.

The most recent analyst rating on (SHC) stock is a Buy with a $15.00 price target. To see the full list of analyst forecasts on Sotera Health stock, see the SHC Stock Forecast page.

Sotera Health Settles Ethylene Oxide Claims for $30.9M

On April 3, 2025, Sterigenics U.S., LLC, a subsidiary of Sotera Health Company, agreed to a settlement of $30,943,000 to resolve 97 ethylene oxide claims related to its former Willowbrook, Illinois facility. The settlement, which requires participation from all claimants and court approval, is not an admission of liability by Sterigenics and is expected to be finalized within 60 to 90 days, potentially impacting the company’s legal standing and stakeholder relations.