Steris (STE)
NYSE:STE
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Steris
(NYSE:STE)
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Rating:69Neutral
Price Target:
$239.00
▼(-9.39% Downside)
Action:DowngradedDate:02/06/26
The score is primarily driven by solid fundamentals (improving profitability and strong cash generation) and a constructive earnings update with maintained FY2026 guidance. These positives are tempered by weak near-term technicals (trading below major moving averages with negative momentum) and a relatively expensive valuation (P/E ~36.5 with ~1% yield), plus tariff-driven margin pressure highlighted on the call.
Positive Factors
Strong cash generation
STERIS's consistent operating cash flow and high free cash flow conversion provide durable financial flexibility. With OCF materially above accounting earnings, the company can fund capex, service investments, debt reduction and disciplined M&A without relying on external financing, cushioning it through demand cycles.
Negative Factors
Tariff-driven margin pressure
Persisting tariffs constitute a structural cost headwind tied to trade policy and the company's capital-equipment exposure. Management expects multi‑tens‑of‑millions in recurring tariff impacts, which can steadily erode gross margins and limit EPS upside unless offset by permanent sourcing changes or price increases.
Read all positive and negative factors
Positive Factors
Negative Factors
Strong cash generation
STERIS's consistent operating cash flow and high free cash flow conversion provide durable financial flexibility. With OCF materially above accounting earnings, the company can fund capex, service investments, debt reduction and disciplined M&A without relying on external financing, cushioning it through demand cycles.
Read all positive factors
Steris (STE) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$21.45B
Dividend Yield0.94%
Average Volume (3M)960.37K
Price to Earnings (P/E)32.3
Beta (1Y)0.44
Revenue Growth5.15%
EPS Growth60.30%
CountryUS
Employees18,000
SectorHealthcare
Sector Strength45
IndustryMedical - Devices
Share Statistics
EPS (TTM)2.53
Shares Outstanding98,075,030
10 Day Avg. Volume914,513
30 Day Avg. Volume960,371
Financial Highlights & Ratios
PEG Ratio0.58
Price to Book (P/B)3.38
Price to Sales (P/S)4.09
P/FCF Ratio28.72
Enterprise Value/Market Cap1.08
Enterprise Value/Revenue3.98
Enterprise Value/Gross Profit9.03
Enterprise Value/Ebitda17.04
Forecast
1Y Price Target
$295.50Price Target Upside12.03% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering4
EPS Forecast (FY)11.12
Revenue Forecast (FY)$6.31B
Steris Business Overview & Revenue Model
Company Description
STERIS 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 che...
How the Company Makes Money
STERIS makes money primarily by selling a mix of (1) capital equipment, (2) recurring consumables, and (3) service and outsourced solutions tied to sterilization and infection prevention.
1) Sale of capital equipment (one-time or project-based re...
Steris Key Performance Indicators (KPIs)
Any
Operating Margin by Segment
Measures the efficiency of each segment in converting revenue into profit, indicating competitive strengths or weaknesses and potential areas for cost optimization.
Measures the efficiency of each segment in converting revenue into profit, indicating competitive strengths or weaknesses and potential areas for cost optimization.
Data provided by:
The Fly
The FlySteris Earnings Call Summary
Earnings Call Date:Feb 04, 2026
(Q3-2026)
| % Change Since: |
Next Earnings Date:May 20, 2026
Earnings Call Sentiment Positive
The call presented solid top-line growth, EPS expansion, strong segment-level performance (notably AST capital equipment and healthcare services), and maintained full-year guidance — indicating operational resilience. However, meaningful margin pressure from tariffs and inflation, a notable gross margin decline, and seasonal/timing risks for the fourth quarter temper the outlook. Management is actively pursuing mitigation efforts and remains disciplined on capital and M&A. Overall, positives (revenue, EPS, segment momentum, backlog, leverage) outweigh the headwinds (tariffs, margin compression, near-term volatility).Positive Updates
Top-Line Growth
Total as-reported revenue grew 9% in the third quarter; constant currency organic revenue grew 8%, driven by volume and ~200 basis points of price.
Negative Updates
Margin Pressure — Gross Margin Decline
Gross margin declined 70 basis points year-over-year to 43.9%, with positive price and productivity being more than offset by increased tariffs and inflation.
Read all updates
Q3-2026 Updates
Positive
Negative
Top-Line Growth
Total as-reported revenue grew 9% in the third quarter; constant currency organic revenue grew 8%, driven by volume and ~200 basis points of price.
Read all positive updates
Company Guidance
STERIS said it is maintaining FY2026 guidance, calling for as‑reported revenue growth of about 8–9% and constant‑currency organic revenue growth of 7–8%, adjusted diluted EPS guidance around $10.00–$10.30 (with the company noting the high end is less likely given roughly $10M of incremental tariffs), expected free cash flow of $850M and planned CapEx of $375M; management said tariffs are modeled at roughly a $55M annual run‑rate (Q3 included about $16M pretax tariff impact). For context, Q3 adjusted EPS was $2.53 (+9%), gross margin was 43.9% (‑70 bps), EBIT margin 22.9% (‑40 bps), YTD CapEx $278.8M, D&A $363.1M, reported nine‑month free cash flow $7.368B, total debt $1.9B and gross debt/EBITDA ≈1.2x.Steris Financial Statement Overview
Summary
Income Statement
78
Positive
Balance Sheet
74
Positive
Cash Flow
72
Positive
| Breakdown | TTM | Mar 2025 | Mar 2024 | Mar 2023 | Mar 2022 | Mar 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 5.83B | 5.46B | 5.14B | 4.54B | 4.22B | 3.11B |
| Gross Profit | 2.57B | 2.40B | 2.22B | 1.98B | 1.88B | 1.34B |
| EBITDA | 1.36B | 1.36B | 1.41B | 1.34B | 1.01B | 773.95M |
| Net Income | 707.77M | 614.64M | 378.24M | 107.03M | 243.89M | 397.40M |
Balance Sheet | ||||||
| Total Assets | 10.59B | 10.15B | 11.06B | 10.82B | 11.42B | 6.57B |
| Cash, Cash Equivalents and Short-Term Investments | 423.70M | 171.70M | 207.02M | 208.36M | 348.32M | 220.53M |
| Total Debt | 2.05B | 2.20B | 3.38B | 3.25B | 3.28B | 1.80B |
| Total Liabilities | 3.42B | 3.53B | 4.75B | 4.73B | 4.88B | 2.68B |
| Stockholders Equity | 7.17B | 6.60B | 6.30B | 6.08B | 6.53B | 3.88B |
Cash Flow | ||||||
| Free Cash Flow | 917.10M | 778.00M | 612.95M | 394.98M | 397.25M | 450.38M |
| Operating Cash Flow | 1.27B | 1.15B | 973.27M | 756.95M | 684.81M | 689.64M |
| Investing Cash Flow | -365.10M | 388.77M | -887.36M | -383.33M | -666.56M | -1.15B |
| Financing Cash Flow | -648.37M | -1.57B | -85.19M | -498.72M | 115.83M | 345.62M |
Steris Technical Analysis
Negative
263.77
Price Trends
239.30
Negative
248.86
Negative
243.47
Negative
Market Momentum
-5.47
Negative
36.47
Neutral
39.88
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For STE, the sentiment is Negative. The current price of 263.77 is above the 20-day moving average (MA) of 220.51, above the 50-day MA of 239.30, and above the 200-day MA of 243.47, indicating a bearish trend. The MACD of -5.47 indicates Negative momentum. The RSI at 36.47 is Neutral, neither overbought nor oversold. The STOCH value of 39.88 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for STE.
Steris Risk Analysis
Steris disclosed 36 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
UnderperformOutperform
Sector (51)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
77 Outperform | $23.95B | 30.97 | 32.44% | ― | 14.21% | 5.66% | |
72 Outperform | $13.59B | 22.70 | 11.79% | 2.28% | 5.78% | 61.52% | |
69 Neutral | $21.45B | 32.31 | 10.21% | 0.94% | 5.15% | 60.30% | |
68 Neutral | $14.38B | 80.92 | 17.36% | ― | 27.12% | -41.72% | |
65 Neutral | $17.78B | 25.25 | 5.60% | 1.05% | 5.47% | -23.03% | |
64 Neutral | $25.80B | 24.78 | 8.21% | 3.30% | -0.76% | -55.03% | |
51 Neutral | $7.86B | -0.30 | -43.30% | 2.27% | 22.53% | -2.21% |
* Healthcare Sector Average
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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.