Sotera Health (SHC) AI Stock Analysis

• Market Cap: $4.47B
• Dividend Yield: N/A
• Average Volume (3M): 1.73M
• Price to Earnings (P/E): 83.6
• Beta (1Y): 1.00
• 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: 2,650,234
• 30 Day Avg. Volume: 1,731,610
• 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: 1.45
• Enterprise Value/Revenue: 5.64
• Enterprise Value/Gross Profit: 10.07
• Enterprise Value/Ebitda: 15.20
• 1Y Price Target: $18.50
• Price Target Upside: 17.53% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 5
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 67 Neutral
• Price Target: $18.00 ▲(14.36% Upside)

Sotera Health's strong earnings performance and positive technical indicators are the primary drivers of its stock score. However, high debt levels and a high P/E ratio pose risks. The company's strategic debt reduction and revenue growth provide a positive outlook, but profitability and litigation challenges remain concerns.

Positive Factors

Revenue Growth

Sotera Health's consistent revenue growth indicates strong demand for its services and effective market penetration, supporting long-term business stability.

Debt Reduction

Reducing debt enhances financial flexibility and lowers interest expenses, improving the company's long-term financial health and operational resilience.

License Renewal

The long-term license renewal ensures a stable supply of critical materials, supporting sustained operations and long-term revenue streams in a key business segment.

Negative Factors

High Debt Levels

High debt levels can limit financial flexibility and increase risk, potentially impacting the company's ability to invest in growth opportunities and weather economic downturns.

Profitability Challenges

Low profitability margins indicate challenges in cost management and pricing power, which could hinder long-term earnings growth and shareholder returns.

Litigation Challenges

Litigation poses financial and reputational risks, potentially leading to significant legal expenses and impacting the company's operational focus and resources.

Sotera Health Business Overview & Revenue Model

Company Description

Sotera Health Company (SHC) is a leading provider of integrated sterilization and lab services, primarily serving the healthcare and pharmaceutical industries. The company operates through its key divisions, including sterilization services, laboratory services, and radiation services, offering critical solutions to ensure the safety and efficacy of medical devices and pharmaceuticals. SHC's portfolio includes a range of services such as ethylene oxide sterilization, gamma irradiation, and other sterilization technologies, catering to a diverse client base that includes manufacturers and healthcare providers.

How the Company Makes Money

Sotera Health generates revenue primarily through its sterilization and laboratory services. The company charges clients for the use of its specialized sterilization facilities and equipment, as well as for laboratory testing and quality assurance services. Key revenue streams include contracts with healthcare manufacturers for sterilization processes, testing services for medical products, and partnerships with pharmaceutical companies for compliance testing. Additionally, SHC benefits from long-term contracts and relationships with major clients, which provide a stable revenue base. Strategic collaborations with industry partners further enhance its market reach and operational efficiency, contributing to overall earnings.

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: 15.74
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• 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 15.74 is below the 20-day moving average (MA) of 16.39, below the 50-day MA of 16.09, and above the 200-day MA of 13.35, indicating a neutral trend. The MACD of -0.02 indicates Positive momentum. The RSI at 49.30 is Neutral, neither overbought nor oversold. The STOCH value of 21.86 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
ILMN	73 Outperform	$18.63B	27.27	31.20%	―	-2.39%	―
DGX	70 Outperform	$20.50B	21.63	13.69%	1.67%	13.74%	14.87%
QGEN	68 Neutral	$9.36B	23.29	11.29%	2.83%	5.32%	336.29%
SHC	67 Neutral	$4.47B	83.58	10.86%	―	2.67%	-21.96%
EXAS	62 Neutral	$12.61B	―	-34.54%	―	14.47%	-353.69%
CRL	56 Neutral	$8.27B	―	-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 Reports Strong Q3 2025 Financial Results

Sotera Health Company is a global leader in providing essential sterilization solutions, lab testing, and advisory services for the healthcare industry, operating through its three businesses: Sterigenics, Nordion, and Nelson Labs. In its latest earnings report, Sotera Health announced a robust financial performance for the third quarter of 2025, with net revenues increasing by 9.1% to $311 million compared to the same period in 2024. The company also reported a significant rise in net income to $48 million, up from $17 million in the previous year, and an adjusted EBITDA increase of 12.2% to $164 million.

Sotera Health Earnings Call: Strong Growth Amid Challenges

Sotera Health’s Earnings Call Reflects Optimism Amidst Challenges

Sotera Health Amends Credit Agreement for $1.42 Billion

On September 17, 2025, Sotera Health Company and its subsidiaries entered into an amendment to their First Lien Credit Agreement, originally dated December 13, 2019. This amendment involves refinancing term loans totaling approximately $1.42 billion, following a $75 million repayment using available cash, and includes a reduction in the interest rate spread by 0.50%. The repriced term loans, which mature on May 30, 2031, are subject to a 1.00% soft call premium for certain repricing transactions within six months of the amendment’s effective date, potentially impacting the company’s financial operations and cost of capital.

The most recent analyst rating on (SHC) stock is a Hold with a $16.50 price target. To see the full list of analyst forecasts on Sotera Health stock, see the SHC Stock Forecast page.

Sotera Health Shareholders Sell 20 Million Shares

On September 5, 2025, Sotera Health Company witnessed the sale of 20,000,000 shares of its common stock by certain stockholders to Goldman Sachs & Co. LLC, under an underwriting agreement. The company itself did not sell any shares and will not benefit financially from this transaction, which may affect the stockholders’ equity distribution but not the company’s direct financial standing.

The most recent analyst rating on (SHC) stock is a Hold with a $17.00 price target. To see the full list of analyst forecasts on Sotera Health stock, see the SHC Stock Forecast page.

Sotera Health’s Earnings Call Highlights Growth and Optimism

Sotera Health Company recently held its earnings call, which reflected a positive sentiment overall. The company reported strong top line and adjusted EBITDA growth, raised its 2025 outlook, and continued to improve liquidity and leverage. Despite some challenges in specific segments such as Nelson Labs and Nordion, the overall performance and strategic investments indicate a robust financial health and growth trajectory.

Sotera Health Reports Strong 2025 Financial Results

Sotera Health Company is a leading global provider specializing in sterilization solutions, lab testing, and advisory services for the healthcare industry, operating through its three businesses: Sterigenics, Nordion, and Nelson Labs.