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Sotera Health
(NASDAQ:SHC)
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Rating:59Neutral
Price Target:
$18.50
▲(6.32% Upside)
Action:Reiterated
Date:05/23/26
The score is driven primarily by improving operating performance but constrained by high leverage and uneven free-cash-flow conversion. Technicals are neutral-to-mixed, while valuation (high P/E and no dividend) is a notable drag. Earnings-call commentary and recent events are supportive, highlighting reaffirmed guidance, improving liquidity/leverage trajectory, and reduced legal overhang.
Positive Factors
Recurring, regulated service demand
Sotera’s core services are embedded in customers’ manufacturing and regulatory workflows, creating recurring revenue and high switching costs. Regulated sterilization and testing require ongoing third-party validation, supporting durable demand and predictable baseline volume over multi-year horizons.
Negative Factors
Elevated leverage
Sotera’s aggressive capital structure increases sensitivity to interest rates and refinancing cycles, constraining strategic optionality. High leverage limits free cash deployment for organic investment or M&A, and makes the company more vulnerable to earnings or cash-flow shocks over a multi-quarter horizon.
Read all positive and negative factors
Positive Factors
Negative Factors
Recurring, regulated service demand
Sotera’s core services are embedded in customers’ manufacturing and regulatory workflows, creating recurring revenue and high switching costs. Regulated sterilization and testing require ongoing third-party validation, supporting durable demand and predictable baseline volume over multi-year horizons.
Read all positive factors
Sotera Health Key Performance Indicators (KPIs)
Any
Net Revenue by Segment
Breaks down Sotera's revenue by business line, revealing which segments drive sales growth and where demand is strongest or weakest. A concentrated revenue base increases dependence on a few markets, while diversified growth across segments signals resilience. Tracking segment revenue trends highlights areas of pricing power, volume gains, or contract wins that are likely to shape future earnings.
Breaks down Sotera's revenue by business line, revealing which segments drive sales growth and where demand is strongest or weakest. A concentrated revenue base increases dependence on a few markets, while diversified growth across segments signals resilience. Tracking segment revenue trends highlights areas of pricing power, volume gains, or contract wins that are likely to shape future earnings.
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The Fly
The FlySotera Health (SHC) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$5.11B
Dividend YieldN/A
Average Volume (3M)3.56M
Price to Earnings (P/E)43.6
Beta (1Y)1.14
Revenue Growth7.44%
EPS Growth372.41%
CountryUS
Employees3,000
SectorHealthcare
Sector Strength45
IndustryMedical - Diagnostics & Research
Share Statistics
EPS (TTM)0.41
Shares Outstanding285,167,000
10 Day Avg. Volume2,516,763
30 Day Avg. Volume3,556,085
Financial Highlights & Ratios
PEG Ratio0.95
Price to Book (P/B)8.27
Price to Sales (P/S)4.30
P/FCF Ratio33.58
Enterprise Value/Market Cap1.24
Enterprise Value/Revenue5.35
Enterprise Value/Gross Profit9.73
Enterprise Value/Ebitda13.02
Forecast
1Y Price Target
$21.33Price Target Upside22.61% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering6
EPS Forecast (FY)0.97
Revenue Forecast (FY)$1.24B
Sotera Health Business Overview & Revenue Model
Company Description
Sotera Health Company, headquartered in Broadview Heights, Ohio, delivers essential sterilization, laboratory testing, and advisory services to a global clientele spanning North America, Europe, and various international regions. The firm's steril...
How the Company Makes Money
Sotera Health makes money primarily by selling outsourced services and related products that are embedded in customers’ manufacturing, quality, and regulatory workflows.
1) Sterigenics (sterilization services): This segment generates revenue by s...
Sotera Health Earnings Call Summary
Earnings Call Date:May 05, 2026
(Q1-2026)
| % Change Since: |
Next Earnings Date:Aug 06, 2026
Earnings Call Sentiment Positive
The call conveyed predominantly positive operational and financial momentum: company delivered revenue and adjusted EBITDA growth, expanded margins, strong Nordion performance, improved adjusted EPS, meaningful legal dismissals, solid liquidity, and reaffirmed guidance. Key risks and near-term headwinds include Nelson Labs' revenue and margin pressure, some timing-driven results (Nordion harvest schedules and FX benefits), Sterigenics weather/downtime variability, elevated CapEx, and remaining leverage above target. Overall, the positive execution, legal outcomes, and reaffirmed outlook outweigh the identifiable challenges.Positive Updates
Consolidated Revenue Growth
Total company revenues rose 10% to $280 million in Q1 2026, or 6.5% on a constant currency basis versus Q1 2025, reflecting broad-based demand and FX tailwinds.
Negative Updates
Nelson Labs Revenue and Margin Pressure
Nelson Labs revenue declined 0.7% to $52 million (down 3.8% constant currency); segment income decreased 11.5% to $15 million (down 15.1% CC) and margins stepped down to 28% reflecting lower volume/mix and continued recovery work from prior headwinds.
Read all updates
Q1-2026 Updates
Positive
Negative
Consolidated Revenue Growth
Total company revenues rose 10% to $280 million in Q1 2026, or 6.5% on a constant currency basis versus Q1 2025, reflecting broad-based demand and FX tailwinds.
Read all positive updates
Company Guidance
Sotera reaffirmed 2026 guidance calling for total company revenue of $1.233–$1.251 billion (5.0%–6.5% constant-currency growth, with an estimated ~100 bps FX tailwind mostly realized in H1), adjusted EBITDA of $632–$641 million (5.5%–7.0% constant-currency growth, ~100 bps FX benefit), and adjusted EPS of $0.93–$1.01; the company expects interest expense of $135–$145 million, an adjusted-tax rate of 27%–29%, depreciation to rise, a weighted-average diluted share count of ~289–291 million, capex of $175–$225 million, continued net-leverage improvement from 3.2x toward the 2.0–3.0x target, and guidance that assumes no M&A. Segment assumptions include Sterigenics mid‑to‑high‑single‑digit constant‑currency revenue growth (Q2 similar to Q1) with pricing toward the high end of the 3%–4% range, Nordion low‑to‑mid‑single‑digit growth with ~40%–45% of its revenue in H1, and Nelson Labs low‑single‑digit constant‑currency growth with a slight Q2 return to growth and full‑year margins in the low‑to‑mid‑30s.Sotera Health Financial Statement Overview
Summary
Income Statement
74
Positive
Balance Sheet
46
Neutral
Cash Flow
58
Neutral
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 1.19B | 1.16B | 1.10B | 1.05B | 1.00B | 931.48M |
| Gross Profit | 654.14M | 645.53M | 602.29M | 577.16M | 557.00M | 518.67M |
| EBITDA | 488.82M | 442.25M | 442.20M | 406.83M | -17.41M | 400.81M |
| Net Income | 117.80M | 77.95M | 44.40M | 51.38M | -233.57M | 116.88M |
Balance Sheet | ||||||
| Total Assets | 3.24B | 3.26B | 3.07B | 3.13B | 3.12B | 2.79B |
| Cash, Cash Equivalents and Short-Term Investments | 315.94M | 346.46M | 277.24M | 296.41M | 395.21M | 106.92M |
| Total Debt | 2.27B | 2.27B | 2.35B | 2.33B | 2.03B | 1.83B |
| Total Liabilities | 2.61B | 2.66B | 2.67B | 2.69B | 2.77B | 2.20B |
| Stockholders Equity | 622.50M | 606.03M | 404.91M | 443.73M | 350.24M | 586.10M |
Cash Flow | ||||||
| Free Cash Flow | 96.84M | 149.18M | 45.09M | -362.71M | 95.58M | 179.38M |
| Operating Cash Flow | 261.11M | 287.19M | 224.16M | -147.73M | 277.96M | 281.55M |
| Investing Cash Flow | -160.39M | -135.14M | -179.00M | -214.91M | -181.90M | -159.83M |
| Financing Cash Flow | -105.23M | -100.53M | -50.56M | 265.96M | 197.76M | -117.29M |
Sotera Health Technical Analysis
Positive
17.40
Price Trends
15.91
Positive
15.62
Positive
16.29
Positive
Market Momentum
0.54
Negative
72.72
Negative
92.18
Negative
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 17.4 is above the 20-day moving average (MA) of 16.48, above the 50-day MA of 15.91, and above the 200-day MA of 16.29, indicating a bullish trend. The MACD of 0.54 indicates Negative momentum. The RSI at 72.72 is Negative, neither overbought nor oversold. The STOCH value of 92.18 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for SHC.
Sotera Health Risk Analysis
Sotera Health disclosed 47 risk factors in its most recent earnings report. Sotera Health reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Sotera Health Peers Comparison
UnderperformOutperform
Sector (51)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
74 Outperform | $28.55B | 34.06 | 33.99% | ― | 1.25% | ― | |
71 Outperform | $8.26B | 21.22 | 11.28% | 3.31% | 4.79% | 333.61% | |
70 Outperform | $23.88B | 23.52 | 14.11% | 1.80% | 11.03% | 14.34% | |
61 Neutral | $11.11B | -61.52 | -5.74% | ― | 0.11% | -492.25% | |
59 Neutral | $5.11B | 43.59 | 20.57% | ― | 7.44% | 372.41% | |
51 Neutral | $7.86B | -0.30 | -43.30% | 2.27% | 22.53% | -2.21% |
* Healthcare Sector Average
SHC
Sotera Health
17.93
6.53
57.28%
CRL
Charles River Labs
230.69
76.79
49.90%
ILMN
Illumina
188.68
91.53
94.22%
QGEN
Qiagen
40.10
-7.51
-15.77%
DGX
Quest Diagnostics
215.72
44.06
25.66%
Sotera Health Corporate Events
Executive/Board ChangesShareholder Meetings
Sotera Health Shareholders Back Board, Pay and Auditor
Positive
May 22, 2026
Sotera Health Company held its 2026 annual meeting of stockholders on May 21, 2026, where shareholders elected all four Class III director nominees to three-year terms ending at the 2029 annual meeting. Investors also approved on an advisory basis...
Business Operations and StrategyPrivate Placements and Financing
Sotera Health Refinances Term Loans to Lower Borrowing Costs
Positive
May 20, 2026
On May 20, 2026, Sotera Health Company and Sotera Health Holdings, LLC amended their first lien credit agreement with JPMorgan Chase Bank and a group of refinancing term lenders, securing $1.42 billion in new repriced term loans. The amendment red...
Business Operations and StrategyPrivate Placements and FinancingRegulatory Filings and Compliance
Sotera Health Shifts to Conventional Governance After Sponsors Exit
Neutral
May 13, 2026
On May 11, 2026, Sotera Health entered into an underwriting agreement with certain selling stockholders and Goldman Sachs Co. LLC for the secondary sale of 31,838,253 shares of its common stock at $15.168 per share. On May 13, 2026, these selling...
Business Operations and StrategyExecutive/Board ChangesFinancial Disclosures
Sotera Health Names New CEO, Highlights Leadership Transition
Positive
May 5, 2026
On May 5, 2026, Sotera Health announced that its board appointed industry veteran Alton Shader as chief executive officer and Class II director effective May 26, 2026, while incumbent CEO and chairman Michael B. Petras, Jr. will shift to the role ...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.