Education
About Us
Working with TipRanks
Follow Us
Steris (STE)
:STE
Top Page
Steris
(NYSE:STE)
Rating:80Outperform
Price Target:
$279.00
▲(14.98%Upside)
Positive Factors
Competitive Position
Steris's procedure volumes remain strong, benefiting from a favorable competitive position with its EO sterilization modality.
Financial Performance
STE's gross margin was up 170 bps Y/Y and above consensus while its operating margin was up 220 bps Y/Y and above consensus.
Revenue Guidance
Management provided reported revenue guidance that was above consensus for FY26.
Negative Factors
Healthcare Policy Changes
Potential healthcare policy changes could disrupt Steris's business, with millions losing coverage and impacting procedure volumes.
Life Sciences Challenges
The Life Sciences segment of Steris faces challenges due to pressures in the biopharma value chain and possible reimbursement issues.
Macroeconomic Impact
Uncertainties in macroeconomic and political factors are expected to negatively impact Steris's revenue growth projections for the coming years.
Steris (STE) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$23.87B
Dividend Yield0.95%
Average Volume (3M)539.41K
Price to Earnings (P/E)38.2
Beta (1Y)0.54
Revenue Growth0.32%
EPS Growth64.36%
CountryUS
Employees18,000
SectorHealthcare
Sector Strength44
IndustryMedical - Devices
Share Statistics
EPS (TTM)2.74
Shares Outstanding98,370,980
10 Day Avg. Volume532,856
30 Day Avg. Volume539,413
Financial Highlights & Ratios
PEG Ratio1.20
Price to Book (P/B)3.50
Price to Sales (P/S)0.00
P/FCF Ratio29.71
Enterprise Value/Market Cap0.97
Enterprise Value/Revenue1.08
Enterprise Value/Gross Profit9.35
Enterprise Value/Ebitda4.24
Forecast
1Y Price Target
$265.83Price Target Upside9.55% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering7
Steris Business Overview & Revenue Model
Company DescriptionSTERIS plc provides infection prevention and other procedural products and services worldwide. It operates through four segments: Healthcare, Applied Sterilization Technologies, Life Sciences, and Dental. The Healthcare segment offers cleaning chemistries and sterility assurance products; automated endoscope reprocessing system and tracking products; accessories for gastrointestinal (GI) procedures, washers, sterilizers, and other pieces of capital equipment for the operation of a sterile processing department; and equipment used directly in the operating room, including surgical tables, lights, and connectivity solutions, as well as equipment management services. It also provides capital equipment installation, maintenance, upgradation, repair, and troubleshooting services; preventive maintenance programs and repair services; instrument and endoscope repair and maintenance services; and custom process improvement consulting and outsourced instrument sterile processing services. The Applied Sterilization Technologies segment provides contract sterilization and testing services for medical device and pharmaceutical manufacturers through a network of approximately 50 contract sterilization and laboratory facilities. The Life Sciences segment designs, manufactures and sells consumable products, such as formulated cleaning chemistries, barrier and sterility assurance products, steam and vaporized hydrogen peroxide sterilizers, and washer disinfectors. This segment also offers equipment installation, maintenance, upgradation, repair, and troubleshooting services; and preventive maintenance programs and repair services. The Dental segment provides hand and powered dental instruments, infection control products, personal protective equipment, and water quality products for dental suite. The company serves its products and services to hospitals, other healthcare providers, and pharmaceutical manufacturers. The company was founded in 1985 and is based in Dublin, Ireland.
How the Company Makes MoneySteris makes money through a diversified revenue model that encompasses various streams. Primarily, the company generates revenue by selling its wide array of infection prevention and sterilization products, such as sterilizers, washers, and other related equipment, to hospitals, surgery centers, and other medical facilities. Additionally, Steris offers comprehensive service contracts for maintenance and repair of its equipment, which provides a steady stream of recurring revenue. The company also provides outsourced contract sterilization services for medical device and pharmaceutical manufacturers, leveraging its extensive network of advanced sterilization facilities. Strategic partnerships and long-term agreements with healthcare providers and pharmaceutical companies further enhance its financial stability and growth potential.
Steris Earnings Call Summary
Earnings Call Date:May 14, 2025
(Q4-2025)
| % Change Since: 6.92%|
Next Earnings Date:Aug 11, 2025
Earnings Call Sentiment Positive
The earnings call reflects a strong financial performance with significant revenue and earnings growth, record free cash flow, and improved margins in key segments. However, challenges such as a decline in healthcare capital equipment revenue, tariff costs, and legal settlement impacts on cash flow present concerns. Despite these issues, the overall sentiment remains positive due to the outweighing highlights.Q4-2025 Updates
Positive Updates
Revenue and Earnings Growth
Total as reported revenue grew 4%, and constant currency organic revenue grew 6% in the quarter. Adjusted earnings per diluted share from continuing operations was $2.74, a 40% increase over the prior year.
Record Free Cash Flow
Free cash flow for fiscal 2025 was a record $787 million, well above the full-year guidance, driven by significant working capital improvements.
Healthcare Segment Performance
Healthcare constant currency organic revenue grew 6% for the year with margins improving to 25% due to volume, pricing, and productivity.
AST Segment Growth
Constant currency organic revenue for AST grew 9% for the year with 7% growth in services.
Improved Margins in Life Sciences
Margins in Life Sciences increased to 42.3%, a 360 basis point improvement, due to favorable mix, pricing, and divestiture of the CECS business.
Negative Updates
Healthcare Capital Equipment Revenue Decline
Healthcare capital equipment revenue declined 5% for the year against a record year last year.
Challenges in AST Margins
EBIT margins for AST were 44.8%, down slightly year-over-year due to energy and labor headwinds and a negative mix shift from capital equipment shipments.
Tariff Costs Impact
The fiscal 2026 outlook includes $30 million of tariff costs, impacting the EPS range and reflecting a challenge for the company.
Legal Settlement Impact on Cash Flow
A $40 million legal settlement for ETO in FY 2026 is expected to negatively impact cash flow.
Company Guidance
During STERIS plc's Fourth Quarter 2025 Conference Call, the company provided a comprehensive update on their financial performance and guidance. For Q4, total revenue grew by 4% and constant currency organic revenue increased by 6%, supported by a 210 basis point price rise. Gross margin improved by 170 basis points to 44.3%, while EBIT margin increased by 110 basis points to 24.8% of revenue. The adjusted effective tax rate was 23.5%, and net income from continuing operations reached $270 million, with adjusted earnings per diluted share at $2.74, a 40% increase over the prior year. Fiscal 2025 saw capital expenditures of $370 million and depreciation and amortization of $476 million. The company reduced its debt to $2 billion, achieving a gross debt to EBITDA ratio of approximately 1.4x. Free cash flow hit a record $787 million, surpassing full-year guidance. Looking ahead to fiscal 2026, STERIS expects revenue growth of 6% to 7%, with adjusted EPS anticipated to be between $9.90 and $10.15, reflecting a 7% to 10% growth despite a $30 million tariff cost.Steris Financial Statement Overview
Summary
Steris exhibits strong financial performance with robust revenue growth, improved profitability margins, and solid cash flow metrics. While the balance sheet is well-managed, the rising debt levels need monitoring.Income Statement
Steris has shown robust revenue growth with a notable increase in total revenue from $3.11 billion in 2021 to $5.46 billion in 2025, reflecting strong market demand and effective operational strategies. The gross profit margin remains consistently strong, indicating efficient cost management. Net profit margin has improved significantly over the years, particularly evident in 2025, enhancing overall profitability. EBITDA margin and EBIT margin are also solid, supporting the company's operational efficiency and profitability trajectory.89
Very Positive
Balance Sheet
Steris exhibits a sound balance sheet with a healthy equity base and a moderate debt-to-equity ratio, reflecting prudent financial management. The equity ratio is strong, indicating a stable capital structure. Return on Equity (ROE) has shown improvement, suggesting enhanced profitability and effective use of equity capital. However, the increase in total debt over the years could pose a potential risk if not managed carefully.78
Positive
Cash Flow
The company demonstrates strong cash flow generation capabilities with a consistent rise in operating cash flow. Free cash flow has increased notably, supporting future investments and debt servicing. The operating cash flow to net income ratio indicates efficient cash generation relative to earnings. While free cash flow growth is positive, fluctuations in capital expenditures and investing cash flow need monitoring.83
Very Positive
| Breakdown | Mar 2025 | Mar 2024 | Mar 2023 | Mar 2022 | Mar 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 5.46B | 5.14B | 4.54B | 4.59B | 3.11B |
| Gross Profit | 2.40B | 2.24B | 1.98B | 2.02B | 1.34B |
| EBITDA | 866.64M | 1.41B | 1.34B | 1.01B | 800.33M |
| Net Income | 614.64M | 378.24M | 107.03M | 243.89M | 397.40M |
Balance Sheet | |||||
| Total Assets | 10.15B | 11.06B | 10.82B | 11.45B | 6.57B |
| Cash, Cash Equivalents and Short-Term Investments | 171.70M | 207.02M | 208.36M | 348.32M | 220.53M |
| Total Debt | 2.04B | 3.38B | 3.25B | 3.28B | 1.65B |
| Total Liabilities | 3.53B | 4.75B | 4.73B | 4.91B | 2.68B |
| Stockholders Equity | 6.62B | 6.30B | 6.09B | 6.54B | 3.89B |
Cash Flow | |||||
| Free Cash Flow | 778.00M | 612.95M | 394.98M | 397.25M | 450.38M |
| Operating Cash Flow | 1.15B | 973.27M | 756.95M | 684.81M | 689.64M |
| Investing Cash Flow | 388.77M | -887.36M | -383.33M | -666.56M | -1.15B |
| Financing Cash Flow | -1.57B | -85.19M | -498.72M | 115.83M | 345.62M |
Steris Technical Analysis
Positive
242.66
Price Trends
236.04
Positive
229.17
Positive
224.26
Positive
Market Momentum
0.59
Positive
57.87
Neutral
75.32
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For STE, the sentiment is Positive. The current price of 242.66 is above the 20-day moving average (MA) of 240.33, above the 50-day MA of 236.04, and above the 200-day MA of 224.26, indicating a bullish trend. The MACD of 0.59 indicates Positive momentum. The RSI at 57.87 is Neutral, neither overbought nor oversold. The STOCH value of 75.32 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for STE.
Steris Risk Analysis
Steris disclosed 34 risk factors in its most recent earnings report. Steris reported the most risks in the "Legal & Regulatory" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Steris Peers Comparison
Overall Rating
UnderperformOutperform
Sector (51)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
80 Outperform | $13.32B | 32.02 | 7.82% | 3.02% | 4.58% | 55.99% | |
80 Outperform | $23.87B | 38.24 | 9.46% | 0.95% | 0.32% | 64.36% | |
78 Outperform | $33.85B | 65.53 | 23.72% | ― | 9.11% | -17.87% | |
76 Outperform | $21.11B | 53.99 | 37.92% | ― | 23.49% | 71.25% | |
69 Neutral | $18.61B | 20.84 | 7.31% | 1.05% | 3.30% | -2.39% | |
68 Neutral | $7.93B | 44.15 | 4.63% | ― | 32.26% | 112.87% | |
51 Neutral | $7.55B | 0.39 | -61.90% | 2.32% | 17.14% | 1.55% |
* Healthcare Sector Average
Performance Comparison
STE
Steris
242.66
27.43
12.74%
DXCM
Dexcom
83.58
-27.33
-24.64%
PODD
Insulet
299.99
103.27
52.50%
SNN
Smith & Nephew Snats
30.60
6.09
24.85%
ZBH
Zimmer Biomet Holdings
94.06
-11.54
-10.93%
GMED
Globus Medical
60.20
-8.42
-12.27%
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.