Steris plc (STE) provides products and services with a focus on preventing infections. Shares of the company have gained 27.3% over the past 12 months. STE’s recent third-quarter numbers came in ahead of expectations on both its top-line and bottom-line fronts.
Despite supply chain and inflationary challenges, revenue jumped 48.3% year-over-year to $1.2 billion beating estimates by $3.5 million. Earnings per share at $2.12 outperformed estimates by $0.16. This growth came from double-digit gains across consumables, capital equipment, and service revenues coupled with growth in life sciences as well as dental segments.
Looking ahead, STE anticipates constant currency organic revenue growth of 11% and adjusted earnings per share between $7.85 and $7.95 for fiscal 2022.
With these developments in mind, let us take a look at the changes in STE’s key risk factors that investors should know.
According to the TipRanks Risk Factors tool, Steris’ top risk category is Finance & Corporate, contributing 14 of the total 40 risks identified for the stock.
In its recent report, the company has added one key risk factor under the Ability to Sell risk category. Compared to a sector average of 5 risk factors, STE has 3 risk factors under Ability to Sell category.
STE highlighted that the distribution network in the U.S. dental market is characterized by only a few distributors controlling a large share. Consequently, the net sales and profitability of STE’s dental segment hinge on its relationships with these small number of distributors, and the loss of any of these customers could adversely impact the company’s dental segment.
Hedge Fund Activity
According to TipRanks data points that Wall Street’s top hedge funds have decreased holdings in Steris by 1.2 million shares in the last quarter, indicating a very negative hedge fund confidence signal in the stock based on activities of 6 hedge funds.
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