Sotera Health (SHC) AI Stock Analysis

• Market Cap: $4.48B
• Dividend Yield: N/A
• Average Volume (3M): 1.24M
• Price to Earnings (P/E): 188.3
• Beta (1Y): 0.97
• Revenue Growth: 2.40%
• EPS Growth: -40.03%
• Country: US
• Employees: 3,000
• Sector: Healthcare
• Sector Strength: 41
• Industry: Medical - Diagnostics & Research
• EPS (TTM): 0.20
• Shares Outstanding: 284,046,600
• 10 Day Avg. Volume: 1,926,149
• 30 Day Avg. Volume: 1,242,660
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• 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: $16.20
• Price Target Upside: 2.79% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 5

• Rating: 65 Neutral
• Price Target: $17.00 ▲(7.87% Upside)

Sotera Health's overall stock score is driven by strong earnings call performance and positive technical indicators, despite high valuation concerns and financial leverage risks. The company's raised outlook and improved liquidity are significant positives, but the high P/E ratio and overbought technical signals suggest caution.

Positive Factors

Regulatory Requirements

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

Volume Trends

Management was positive on volume trends across Steri and Nelson, with new customer inquiries due to NESHAP regulations stressing competing facilities.

Negative Factors

EBITDA Revisions

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

Litigation Uncertainty

EO litigation headlines have caused small market share losses, but this headwind is abating, and other factors are trending positively, such as customer interest in moving volumes into the U.S.

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 (SHC) is a leading global provider of mission-critical end-to-end sterilization solutions and lab testing services for the healthcare industry. Operating through its three primary segments—Sterigenics, Nordion, and Nelson Labs—the company is dedicated to ensuring the safety of healthcare products. Sterigenics offers comprehensive sterilization services, Nordion provides Cobalt-60 used in radiation therapy and sterilization, and Nelson Labs offers microbiological and analytical lab testing services.

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 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: 15.76
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: 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 15.76 is above the 20-day moving average (MA) of 12.62, above the 50-day MA of 11.97, and above the 200-day MA of 12.66, indicating a bullish trend. The MACD of 0.97 indicates Negative momentum. The RSI at 80.59 is Negative, neither overbought nor oversold. The STOCH value of 97.85 is Negative, 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
QGEN	72 Outperform	$10.60B	28.66	10.81%	2.56%	5.15%	412.41%
ILMN	70 Neutral	$15.38B	12.68	68.11%	―	-3.32%	―
DGX	70 Neutral	$19.95B	21.34	13.65%	1.72%	12.58%	13.00%
SHC	65 Neutral	$4.48B	188.29	5.14%	―	2.40%	-40.03%
Sector *	51 Neutral	$7.46B	-0.16	-46.00%	2.25%	22.76%	-2.28%
CRL	51 Neutral	$7.52B	449.94	-1.96%	―	-1.21%	-115.44%
EXAS	48 Neutral	$8.52B	―	-35.51%	―	12.56%	-464.28%

Sotera Health Corporate Events

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.

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 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.