Sotera Health (SHC) AI Stock Analysis

• Market Cap: $3.84B
• Dividend Yield: N/A
• Average Volume (3M): 2.81M
• Price to Earnings (P/E): 64.3
• Beta (1Y): 1.06
• Revenue Growth: 2.67%
• EPS Growth: -21.96%
• Country: US
• Employees: 3,000
• Sector: Healthcare
• Sector Strength: 45
• Industry: Medical - Diagnostics & Research
• EPS (TTM): 0.26
• Shares Outstanding: 284,392,100
• 10 Day Avg. Volume: 4,193,358
• 30 Day Avg. Volume: 2,814,262
• PEG Ratio: 0.93
• Price to Book (P/B): 8.27
• Price to Sales (P/S): 4.30
• P/FCF Ratio: 33.58
• Enterprise Value/Market Cap: 1.50
• Enterprise Value/Revenue: 4.96
• Enterprise Value/Gross Profit: 8.93
• Enterprise Value/Ebitda: 12.91
• 1Y Price Target: $22.20
• Price Target Upside: 27.59% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 6
• EPS Forecast (FY): 0.96
• Revenue Forecast (FY): $1.24B

• Rating: 57 Neutral
• Price Target: $14.00 ▼(-19.54% Downside)
• Action: Reiterated Date: 03/16/26
• Date: Action: Reiterated 03/16/26

The score reflects improving operating performance and constructive 2026 guidance (growth, margin expansion, and deleveraging), but is held back by a highly leveraged balance sheet and very weak technical setup (price well below key moving averages with negative momentum). A high P/E and no dividend yield provided further limit valuation support.

Positive Factors

Durable recurring revenue

Sotera’s core services—contract sterilization, lab testing and cobalt supply—are mission‑critical to regulated life‑sciences customers, producing repeatable fee revenue. Twenty consecutive years of growth signals durable demand and resilient end markets that support steady revenue over the next 2–6 months.

Strong cash generation & liquidity

Sustained operating cash flow and a large 2025 free cash flow outturn provide funding for capex and deleveraging. Improved liquidity and lower interest costs increase financial flexibility, helping fund strategic investments and buffer against near‑term volatility over the medium term.

Secured cobalt supply & regulatory license

A long‑term license and development partnerships materially reduce cobalt‑60 supply risk for gamma sterilization, reinforcing Nordion’s competitive position. Reliable isotope access supports consistent service delivery and customer retention, underpinning Nordion revenue durability and pricing power.

Negative Factors

High leverage

Although leverage has improved, the capital structure remains meaningfully debt‑heavy. Elevated debt amplifies refinancing and interest‑cost risk, limits strategic flexibility, and makes results more sensitive to cash‑flow hiccups or slower-than-expected growth over the coming months.

Ongoing litigation risk

Active legal proceedings with a scheduled trial create uncertain financial exposure, potential remediation costs, and regulatory scrutiny. The timing and outcome could affect cash, operations and reputation, representing a material medium‑term risk to free cash flow and strategic execution.

Greenfield X‑ray ramp and capex pressure

Investment in greenfield X‑ray capacity increases near‑term capex, depreciation and utilization risk. Lower initial commitments imply a slow ramp and potential margin dilution as fixed costs are absorbed, pressuring free cash flow and margins through the facility ramp period into 2027.

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 makes money by selling outsourced, fee-based services and products that help life-sciences customers sterilize products, validate manufacturing processes, and comply with quality and regulatory requirements. 1) Contract sterilization services (Sterigenics): A major revenue stream comes from providing contract sterilization of medical devices, pharmaceuticals, and related products using multiple modalities (e.g., ethylene oxide, gamma radiation, e-beam). Customers pay service fees that are generally tied to processing volumes, project complexity, and service-level requirements. Because sterilization is often required for commercial distribution and must be performed under validated, audited conditions, customers frequently use Sotera on a recurring basis as part of routine production. 2) Laboratory testing and advisory services (Nelson Labs): Sotera generates revenue by performing microbiology and analytical testing (e.g., sterility assurance-related testing, bioburden and endotoxin testing, material and package testing) and by providing consulting/advisory services that support method development, validation, and regulatory submissions. Revenue is typically earned per test, per project, or under contracted service arrangements with medical device and pharmaceutical manufacturers. 3) Cobalt-60 and gamma-related products/services (Nordion): Sotera earns revenue from supplying cobalt-60 (a radioisotope used in gamma sterilization and certain other applications) and from related services and products tied to gamma technologies. This business can involve longer-term supply relationships and depends on the availability of isotope supply and customer demand for gamma sterilization. Key factors influencing earnings include customer production volumes (which drive sterilization throughput and testing demand), the mix of sterilization modalities and testing complexity, long-term customer relationships in regulated end markets, pricing and capacity utilization at sterilization and lab facilities, and reliable access to critical inputs such as cobalt-60 for gamma-based offerings. Specific partnership details not publicly disclosed by the company are null.

Sotera Health Financial Statement Overview

Summary

Operations are improving (steady revenue growth, ~55% gross margins, net margin up to ~6.7% in 2025, and stronger recent free cash flow), but the balance sheet is a major constraint with high leverage (debt-to-equity ~3.75x) and a history of earnings/cash-flow volatility (notably 2022–2023).

Income Statement

Revenue has grown steadily over the period, rising to $1.16B in 2025 (annual) with a modest ~4.9% increase in 2024 and stronger growth earlier in the cycle. Profitability has improved meaningfully versus the 2022 loss year: net margin rebounded to ~6.7% in 2025 from ~4.0% in 2024 and negative levels in 2022, while gross margin stayed consistently strong around ~55%. The key weakness is earnings volatility (losses in 2020 and 2022) and a step-down in EBITDA margin from ~40%+ in 2021–2024 to ~33.8% in 2025, suggesting some pressure from costs, mix, or non-recurring items.

Balance Sheet

Leverage remains the central balance-sheet risk: total debt is high at ~$2.27B in 2025 (annual) versus equity of ~$606M, translating to a still-elevated debt-to-equity of ~3.75x (improved from ~5.81x in 2024). Equity has rebuilt versus 2024, and return on equity is positive (~12.9% in 2025), but the capital structure is meaningfully debt-heavy, leaving less flexibility if operating conditions soften or refinancing costs rise.

Cash Flow

Cash generation is generally supportive, with operating cash flow of ~$287M and free cash flow of ~$149M in 2025 (annual), and a large jump in free cash flow versus 2024. Operating cash flow exceeds net income in 2024–2025, which is a positive quality signal for earnings. The main concern is variability: 2023 showed negative operating cash flow and deeply negative free cash flow, highlighting potential working-capital swings or episodic cash uses that can interrupt deleveraging.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	1.16B	1.10B	1.05B	1.00B	931.48M
Gross Profit	645.53M	602.29M	577.16M	557.00M	518.67M
EBITDA	303.23M	442.20M	406.83M	-17.41M	400.81M
Net Income	77.95M	44.40M	51.38M	-233.57M	116.88M
Balance Sheet
Total Assets	3.26B	3.07B	3.13B	3.12B	2.79B
Cash, Cash Equivalents and Short-Term Investments	346.46M	277.24M	296.41M	395.21M	106.92M
Total Debt	2.27B	2.35B	2.33B	2.03B	1.83B
Total Liabilities	2.66B	2.67B	2.69B	2.77B	2.20B
Stockholders Equity	606.03M	404.91M	443.73M	350.24M	586.10M
Cash Flow
Free Cash Flow	149.18M	45.09M	-362.71M	95.58M	179.38M
Operating Cash Flow	287.19M	224.16M	-147.73M	277.96M	281.55M
Investing Cash Flow	-135.14M	-179.00M	-214.91M	-181.90M	-159.83M
Financing Cash Flow	-100.53M	-50.56M	265.96M	197.76M	-117.29M

Sotera Health Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 17.40
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Positive
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SHC, the sentiment is Negative. The current price of 17.4 is above the 20-day moving average (MA) of 14.88, above the 50-day MA of 16.87, and above the 200-day MA of 15.41, indicating a bearish trend. The MACD of -1.00 indicates Positive momentum. The RSI at 23.59 is Positive, neither overbought nor oversold. The STOCH value of 22.92 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative 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	$8.26B	23.17	11.85%	3.31%	5.32%	336.29%
DGX	70 Neutral	$21.45B	19.42	13.88%	1.80%	13.74%	14.87%
EXAS	62 Neutral	$20.03B	-92.15	-8.51%	―	14.47%	-353.69%
ILMN	59 Neutral	$19.01B	24.21	34.94%	―	-2.39%	―
SHC	57 Neutral	$3.84B	64.26	14.98%	―	2.67%	-21.96%
Sector *	51 Neutral	$7.86B	-0.30	-43.30%	2.27%	22.53%	-2.21%
CRL	51 Neutral	$7.56B	-69.93	-4.40%	―	-0.92%	-118.96%

Sotera Health Corporate Events

Sotera Health Adds Independent Director Amid Board Reshuffle

On March 12, 2026, Sotera Health director Constantine S. Mihas notified the board that he would resign as a Class I director effective March 16, 2026, following a reduction in the number of directors certain stockholders are entitled to designate, with the company emphasizing that his departure did not arise from any disagreement over operations or policies. On March 15, 2026, the board appointed Kenneth D. Krause, a veteran finance executive from Rollins, Inc. and former CFO and strategy chief at MSA Safety, as a new Class I director effective March 16, 2026, assigning him to the Audit and Litigation Committees and positioning the company to leverage his capital markets and transformation experience under standard independent-director terms and compensation.

Krause’s appointment, which includes a customary indemnification agreement and non-employee director pay in cash retainers and restricted stock units, reinforces Sotera Health’s board independence and financial governance capabilities at a time of evolving shareholder representation. His track record in driving growth, profitability and capital allocation at Rollins and MSA Safety suggests potential benefits for Sotera Health’s strategic execution and risk oversight, while signaling continuity and stability for investors despite the board reshuffle.

The most recent analyst rating on (SHC) stock is a Hold with a $14.00 price target. To see the full list of analyst forecasts on Sotera Health stock, see the SHC Stock Forecast page.

Sotera Health Completes Large Secondary Shareholder Stock Sale

On March 4, 2026, Sotera Health Company and certain selling stockholders entered into an underwriting agreement with Wells Fargo Securities, LLC for the secondary sale of 25,000,000 shares of Sotera Health common stock at $15.270 per share. On March 6, 2026, the selling stockholders completed the sale of these shares to the underwriter, with the company itself issuing no new shares, receiving no proceeds from the transaction, and having no executive officers participate, underscoring that this deal reflects shareholder liquidity rather than a capital-raising move by Sotera Health.

The transaction may affect the trading dynamics and ownership structure of Sotera Health’s common stock, but it leaves the company’s balance sheet and direct capital position unchanged. Legal opinions confirming the validity of the shares were provided in connection with the offering, supporting the formal completion of this secondary sale by existing investors.

The most recent analyst rating on (SHC) stock is a Hold with a $17.50 price target. To see the full list of analyst forecasts on Sotera Health stock, see the SHC Stock Forecast page.

Sotera Health Announces General Counsel Transition and Retirement

In 2025 Sotera Health posted its 20th consecutive year of revenue growth, with full‑year net revenues rising 5.7% to $1.164 billion and net income increasing to $78 million from $44 million in 2024. Adjusted EBITDA climbed 8.2% to $594 million and Adjusted EPS reached $0.86, backed by strong results at Sterigenics and Nordion, improved margins at Nelson Labs and a leaner balance sheet with net leverage reduced to 3.2x.

Fourth‑quarter 2025 net revenues rose 4.6% to $303 million and net income nearly tripled to $35 million, as pricing and volume tailwinds in Sterigenics offset a cobalt‑60 harvest‑related revenue dip at Nordion and modest growth at Nelson Labs. For the full year, Sterigenics and Nordion delivered high‑single‑digit revenue gains and Nelson Labs expanded segment income despite a small revenue decline, underscoring operational resilience across the portfolio.

For 2026 Sotera Health is projecting net revenues between $1.233 billion and $1.251 billion and Adjusted EBITDA of $632 million to $641 million, signaling mid‑single‑digit growth and Adjusted EPS in the $0.93 to $1.01 range. Planned capital spending of $175 million to $225 million and expectations for strong free cash flow suggest continued investment capacity, though the outlook assumes stable supply of ethylene oxide and cobalt‑60 and manageable inflation and labor costs.

On February 18, 2026, Senior Vice President and General Counsel Alex Dimitrief notified the company he will retire on March 31, 2026, after three years in the role, and then serve for up to 12 months as an advisor on ethylene oxide litigation. Deputy General Counsel and Corporate Secretary Erika Ostrowski will be promoted to Senior Vice President and General Counsel effective April 1, 2026, providing leadership continuity in a key legal position as Sotera Health manages ongoing regulatory and litigation exposures.

The most recent analyst rating on (SHC) stock is a Buy with a $24.00 price target. To see the full list of analyst forecasts on Sotera Health stock, see the SHC Stock Forecast page.

Sotera Health Adds Independent Director to Board Committees

On February 4, 2026, Sotera Health Company expanded its Board of Directors from eleven to twelve members and appointed former Timken chief executive Richard G. Kyle as a Class III director, with immediate effect. Kyle, an experienced industrial executive who led Timken’s financial transformation and strategic diversification between 2014 and 2024 and who also serves on the boards of Timken and Sonoco Products Company, has been designated an independent director and will sit on Sotera Health’s Leadership Development and Compensation Committee as well as its Nominating and Corporate Governance Committee, signaling a move to bolster the company’s governance, strategic oversight, and executive-compensation stewardship through seasoned industrial and operational expertise.

The most recent analyst rating on (SHC) stock is a Buy with a $24.00 price target. To see the full list of analyst forecasts on Sotera Health stock, see the SHC Stock Forecast page.

Sotera Health Projects Continued Revenue Growth and Momentum

On January 12, 2026, Sotera Health presented at the 44th Annual J.P. Morgan Healthcare Conference in Cleveland, providing a business update and announcing that 2025 revenue was expected to surpass $1.16 billion, representing at least 5.5% year-over-year growth, or 5.0% on a constant-currency basis. The company highlighted that this performance would mark more than 20 consecutive years of annual revenue growth, underscoring the durability of its business model and financial profile, and signaled continued operational momentum ahead of its full-year 2025 results and 2026 outlook, scheduled for release on February 24, 2026.

The most recent analyst rating on (SHC) stock is a Buy with a $24.00 price target. To see the full list of analyst forecasts on Sotera Health stock, see the SHC Stock Forecast page.