Sotera Health (SHC) AI Stock Analysis

• Market Cap: $5.45B
• Dividend Yield: N/A
• Average Volume (3M): 2.82M
• Price to Earnings (P/E): 99.4
• Beta (1Y): 0.95
• 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: 284,093,930
• 10 Day Avg. Volume: 2,319,280
• 30 Day Avg. Volume: 2,824,627
• 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: 1.19
• Enterprise Value/Revenue: 5.64
• Enterprise Value/Gross Profit: 10.07
• Enterprise Value/Ebitda: 15.20
• 1Y Price Target: $20.42
• Price Target Upside: 6.47% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 9
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 67 Neutral
• Price Target: $20.50 ▲(6.88% Upside)

The score is driven primarily by mixed financial fundamentals (strong gross margins but high leverage and weakening free cash flow), supported by a strong uptrend in the stock. Earnings call guidance and execution were constructive (growth, margin expansion, and debt paydown), but the overall rating is capped by a very high P/E valuation and ongoing operational/litigation risks.

Positive Factors

High Gross Margins

Sotera's ~56% gross margin reflects durable service-based economics and operational scale in sterilization and lab services. High margins provide resilience to cost inflation, support reinvestment in capacity and technology, and underpin long-term profitability even with modest revenue growth.

Long Track Record of Revenue Growth

Two decades of revenue growth indicate a stable, recurring demand base from medical device and pharmaceutical customers and durable contract relationships. This persistent top-line trend supports predictable cash flows and investment planning over the medium term.

Secured Long-Term Supply for Key Input

A 25-year license renewal secures Cobalt-60 supply for gamma irradiation, reducing long-term supply-chain risk and creating a competitive advantage for Sterigenics. Stable access to a critical input supports service continuity and pricing power for years.

Negative Factors

High Leverage

Elevated leverage constrains financial flexibility, increasing refinancing and interest-rate sensitivity. Even with recent debt paydown, high debt levels can limit capital allocation, raise vulnerability to cash-flow variability, and slow deleveraging over the medium term.

Weak Free Cash Flow Generation

A steep decline in free cash flow reduces capacity to fund capex, organic growth, acquisitions, or accelerated debt reduction. Limited FCF generation increases reliance on external financing and may compress strategic optionality over the next several quarters.

Ongoing Litigation Over Ethylene Oxide

Protracted ethylene oxide litigation creates multi-year legal, remediation, and reputational risk for Sterigenics. Uncertain outcomes can lead to material liabilities, operational restrictions, and heightened regulatory scrutiny, affecting long-term margins and capital deployment.

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 services, which account for a significant portion of its earnings. The company charges clients in the healthcare and pharmaceutical industries for sterilizing medical devices and products, ensuring they meet safety standards. Additionally, SHC earns income from its lab services, including testing and validation for various medical products. Key revenue streams include long-term contracts with major manufacturers and partnerships with healthcare providers that require consistent sterilization services. The company also benefits from the increasing demand for sterilization due to the growing healthcare sector and regulatory requirements for product safety.

Sotera Health Financial Statement Overview

Summary

Sotera Health demonstrates solid revenue growth and strong gross profit margins. However, profitability and cash flow management need improvement. High debt levels are a concern, although return on equity is improving.

Income Statement

Sotera Health shows a consistent revenue growth trend, with a TTM revenue growth rate of 2.3%. The gross profit margin remains strong at 55.98%, indicating efficient cost management. However, the net profit margin is relatively low at 4.82%, suggesting room for improvement in profitability. The EBIT margin has decreased from previous years, indicating potential challenges in operational efficiency.

Balance Sheet

The company has a high debt-to-equity ratio, which poses a risk to financial stability. However, the return on equity is improving, reaching 11.79% in the TTM period, reflecting better utilization of equity. The equity ratio is low, indicating a high reliance on debt financing.

Cash Flow

Sotera Health's cash flow position is mixed. The operating cash flow to net income ratio is healthy at 0.70, but free cash flow has decreased significantly, with a negative growth rate of -23.3%. The free cash flow to net income ratio is moderate at 0.31, suggesting limited cash available for reinvestment or debt reduction.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	1.15B	1.10B	1.05B	1.00B	931.48M	818.16M
Gross Profit	643.98M	602.29M	577.16M	557.00M	518.67M	443.57M
EBITDA	426.72M	442.20M	406.83M	-17.41M	400.81M	319.96M
Net Income	55.42M	44.40M	51.38M	-233.57M	116.88M	-38.62M
Balance Sheet
Total Assets	3.19B	3.07B	3.13B	3.12B	2.79B	2.76B
Cash, Cash Equivalents and Short-Term Investments	301.03M	277.24M	296.41M	395.21M	106.92M	102.45M
Total Debt	2.28B	2.35B	2.33B	2.03B	1.83B	1.91B
Total Liabilities	2.64B	2.67B	2.69B	2.77B	2.20B	2.31B
Stockholders Equity	550.47M	404.91M	443.73M	350.24M	586.10M	452.30M
Cash Flow
Free Cash Flow	85.03M	45.09M	-362.71M	95.58M	179.38M	67.08M
Operating Cash Flow	238.22M	224.16M	-147.73M	277.96M	281.55M	120.58M
Investing Cash Flow	-150.31M	-179.00M	-214.91M	-181.90M	-159.83M	-158.69M
Financing Cash Flow	-97.31M	-50.56M	265.96M	197.76M	-117.29M	73.43M

Sotera Health Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 19.18
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• 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 19.18 is above the 20-day moving average (MA) of 18.24, above the 50-day MA of 17.16, and above the 200-day MA of 14.40, indicating a bullish trend. The MACD of 0.62 indicates Negative momentum. The RSI at 73.71 is Negative, neither overbought nor oversold. The STOCH value of 68.51 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
QGEN	77 Outperform	$9.84B	24.38	11.29%	3.31%	5.32%	336.29%
EXAS	70 Outperform	$19.54B	―	-34.54%	―	14.47%	-353.69%
DGX	69 Neutral	$21.08B	22.24	13.69%	1.80%	13.74%	14.87%
SHC	67 Neutral	$5.45B	99.38	10.86%	―	2.67%	-21.96%
ILMN	67 Neutral	$21.64B	31.74	31.20%	―	-2.39%	―
CRL	56 Neutral	$10.81B	―	-2.32%	―	-0.92%	-118.96%
Sector *	51 Neutral	$7.86B	-0.30	-43.30%	2.27%	22.53%	-2.21%

Sotera Health Corporate Events

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.

Sotera Health Stockholders Sell 30 Million Shares

On November 6, 2025, Sotera Health Company and certain stockholders entered into an underwriting agreement with Goldman Sachs & Co. LLC for the sale of 30,000,000 shares of common stock. The shares were sold on November 10, 2025, by the stockholders, and Sotera Health did not receive any proceeds from this transaction.

The most recent analyst rating on (SHC) stock is a Buy with a $20.00 price target. To see the full list of analyst forecasts on Sotera Health stock, see the SHC Stock Forecast page.