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Sotera Health
(NASDAQ:SHC)
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Rating:68Neutral
Price Target:
$20.50
▲(6.94% Upside)
Action:Reiterated
Date:08/07/26
SHC scores positively on technical momentum and a strong, guidance-raising earnings call, which together signal improving fundamentals and market support. The overall score is held back primarily by balance-sheet leverage and inconsistent free cash flow, with valuation also a constraint due to the high P/E and no dividend support.
Positive Factors
Essential, recurring services
Sotera’s core sterilization, irradiation and testing services are regulatory necessities for device and pharma makers, creating recurring demand and high switching costs. Outsourcing of compliance-intensive processes supports durable revenue visibility and long-term customer relationships.
Negative Factors
Elevated leverage
Sotera’s elevated leverage constrains strategic optionality and increases sensitivity to interest-rate moves or cash-flow shocks. A relatively small equity base magnifies ROE but leaves less cushion versus adverse operational or legal outcomes over the next several quarters.
Read all positive and negative factors
Positive Factors
Negative Factors
Essential, recurring services
Sotera’s core sterilization, irradiation and testing services are regulatory necessities for device and pharma makers, creating recurring demand and high switching costs. Outsourcing of compliance-intensive processes supports durable revenue visibility and long-term customer relationships.
Read all positive factors
Sotera Health Key Performance Indicators (KPIs)
Any
Net Revenue by Segment
Breaks down Sotera's revenue by business line, revealing which segments drive sales growth and where demand is strongest or weakest. A concentrated revenue base increases dependence on a few markets, while diversified growth across segments signals resilience. Tracking segment revenue trends highlights areas of pricing power, volume gains, or contract wins that are likely to shape future earnings.
Breaks down Sotera's revenue by business line, revealing which segments drive sales growth and where demand is strongest or weakest. A concentrated revenue base increases dependence on a few markets, while diversified growth across segments signals resilience. Tracking segment revenue trends highlights areas of pricing power, volume gains, or contract wins that are likely to shape future earnings.
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The Fly
The FlySotera Health (SHC) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$5.57B
Dividend YieldN/A
Average Volume (3M)2.71M
Price to Earnings (P/E)34.1
Beta (1Y)1.22
Revenue Growth8.15%
EPS Growth576.89%
CountryUS
Employees3,000
SectorHealthcare
Sector Strength45
IndustryMedical - Diagnostics & Research
Share Statistics
EPS (TTM)0.57
Shares Outstanding285,374,800
10 Day Avg. Volume3,017,015
30 Day Avg. Volume2,708,915
Financial Highlights & Ratios
PEG Ratio0.95
Price to Book (P/B)8.27
Price to Sales (P/S)4.30
P/FCF Ratio33.58
Enterprise Value/Market Cap<0.01
Enterprise Value/Revenue<0.01
Enterprise Value/Gross Profit<0.01
Enterprise Value/Ebitda<0.01
Forecast
1Y Price Target
$22.86Price Target Upside19.23% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering7
EPS Forecast (FY)0.97
Revenue Forecast (FY)$1.24B
Sotera Health Business Overview & Revenue Model
Company Description
Sotera Health Company, headquartered in Broadview Heights, Ohio, delivers essential sterilization, laboratory testing, and advisory services to a global clientele spanning North America, Europe, and various international regions. The firm's steril...
How the Company Makes Money
Sotera Health makes money primarily by selling outsourced services and related products that are embedded in customers’ manufacturing, quality, and regulatory workflows.
1) Sterigenics (sterilization services): This segment generates revenue by s...
Sotera Health Earnings Call Summary
Earnings Call Date:Aug 06, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Nov 10, 2026
Earnings Call Sentiment Positive
The call highlights strong operational execution across the portfolio, with double-digit growth in adjusted EBITDA, revenue beats, margin expansion, improved leverage, lowered interest costs and a raised full-year outlook. Segment-level strength was notable at Sterigenics and Nordion, and Nelson Labs showed recovering sequential margins though year-over-year margin pressures remain. Near-term risks include inflationary cost pressure, FX variability, elevated capital spending (and higher depreciation), timing volatility in Nordion shipments, and ongoing litigation. Taken together, the positives (organic growth, margin expansion, guidance raise, balance sheet improvement) materially outweigh the manageable operational and legal headwinds.Positive Updates
Consolidated Revenue Growth
Total company revenue increased 9.2% to $321.0 million in Q2 2026 (8.0% constant currency) versus Q2 2025.
Negative Updates
Nelson Labs Margin Pressure Versus Prior Year
Although Nelson Labs posted revenue growth, segment income was effectively flat (up 0.6% nominal; down 0.6% constant currency) versus prior year and segment income margin declined year-over-year due to higher costs.
Read all updates
Q2-2026 Updates
Positive
Negative
Consolidated Revenue Growth
Total company revenue increased 9.2% to $321.0 million in Q2 2026 (8.0% constant currency) versus Q2 2025.
Read all positive updates
Company Guidance
Sotera raised its 2026 outlook, now guiding full-year revenue of $1.236–$1.254 billion (5.25%–6.75% constant‑currency growth, with an estimated ~100 bps FX benefit), adjusted EBITDA of $634–$643 million (5.75%–7.25% constant‑currency growth, ~100 bps FX benefit), and adjusted EPS of $0.95–$1.01 (up from a prior $0.93 low). Management expects total‑company pricing of 3%–4%, Sterigenics to deliver mid‑ to high‑single‑digit constant‑currency revenue growth, Nordion low‑ to mid‑single‑digit growth with H2 roughly evenly split between Q3/Q4, and Nelson Labs low‑single‑digit revenue growth with segment income margins in the low‑ to mid‑30% range. Other 2026 outlook items: interest expense $135–$142 million (improved), effective tax rate 27%–28% on adjusted net income, depreciation to increase, diluted share count ~289–291 million, capital expenditures $200–$225 million, and continued net‑leverage improvement from the Q2 net leverage ratio of 3x toward the 2–3x target (with a slight FX headwind expected in Q3).Sotera Health Financial Statement Overview
Summary
Income Statement
78
Positive
Balance Sheet
44
Neutral
Cash Flow
58
Neutral
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 1.22B | 1.16B | 1.10B | 1.05B | 1.00B | 931.48M |
| Gross Profit | 665.48M | 645.53M | 602.29M | 577.16M | 557.00M | 518.67M |
| EBITDA | 539.39M | 442.25M | 442.20M | 406.83M | -17.41M | 400.81M |
| Net Income | 163.48M | 77.95M | 44.40M | 51.38M | -233.57M | 116.88M |
Balance Sheet | ||||||
| Total Assets | 3.31B | 3.26B | 3.07B | 3.13B | 3.12B | 2.79B |
| Cash, Cash Equivalents and Short-Term Investments | 356.73M | 346.46M | 277.24M | 296.41M | 395.21M | 106.92M |
| Total Debt | 2.27B | 2.27B | 2.35B | 2.33B | 2.03B | 1.83B |
| Total Liabilities | 2.64B | 2.66B | 2.67B | 2.69B | 2.77B | 2.20B |
| Stockholders Equity | 665.65M | 606.03M | 404.91M | 443.73M | 350.24M | 586.10M |
Cash Flow | ||||||
| Free Cash Flow | 112.70M | 149.18M | 45.09M | -362.71M | 95.58M | 179.38M |
| Operating Cash Flow | 292.19M | 287.19M | 224.16M | -147.73M | 277.96M | 281.55M |
| Investing Cash Flow | -172.46M | -135.14M | -179.00M | -214.91M | -181.90M | -159.83M |
| Financing Cash Flow | -100.70M | -100.53M | -50.56M | 265.96M | 197.76M | -117.29M |
Sotera Health Technical Analysis
Positive
19.17
Price Trends
17.93
Positive
16.79
Positive
16.70
Positive
Market Momentum
0.46
Negative
64.60
Neutral
79.68
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 19.17 is above the 20-day moving average (MA) of 18.79, above the 50-day MA of 17.93, and above the 200-day MA of 16.70, indicating a bullish trend. The MACD of 0.46 indicates Negative momentum. The RSI at 64.60 is Neutral, neither overbought nor oversold. The STOCH value of 79.68 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for SHC.
Sotera Health Risk Analysis
Sotera Health disclosed 47 risk factors in its most recent earnings report. Sotera Health reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Sotera Health Peers Comparison
UnderperformOutperform
Sector (51)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
74 Outperform | $26.99B | 25.68 | 14.49% | 1.46% | 9.87% | 12.51% | |
74 Outperform | $232.26B | 34.03 | 13.35% | 0.32% | 7.23% | 7.47% | |
74 Outperform | $42.70B | 32.17 | 21.95% | ― | 8.22% | 16.68% | |
73 Outperform | $27.39B | 27.59 | 11.57% | 0.97% | 6.41% | 33.31% | |
68 Neutral | $5.57B | 34.08 | 26.75% | ― | 8.15% | 576.89% | |
56 Neutral | $14.21B | -60.97 | -7.72% | ― | -0.74% | -268.79% | |
51 Neutral | $7.86B | -0.30 | -43.30% | 2.27% | 22.53% | -2.21% |
* Healthcare Sector Average
SHC
Sotera Health
19.54
3.34
20.62%
CRL
Charles River Labs
295.10
131.88
80.80%
LH
Labcorp Holdings
335.72
62.60
22.92%
DGX
Quest Diagnostics
245.00
68.89
39.12%
TMO
Thermo Fisher
633.71
145.75
29.87%
IQV
IQVIA Holdings
261.51
72.78
38.56%
Sotera Health Corporate Events
Executive/Board ChangesShareholder Meetings
Sotera Health Shareholders Back Board, Pay and Auditor
Positive
May 22, 2026
Sotera Health Company held its 2026 annual meeting of stockholders on May 21, 2026, where shareholders elected all four Class III director nominees to three-year terms ending at the 2029 annual meeting. Investors also approved on an advisory basis...
Business Operations and StrategyPrivate Placements and Financing
Sotera Health Refinances Term Loans to Lower Borrowing Costs
Positive
May 20, 2026
On May 20, 2026, Sotera Health Company and Sotera Health Holdings, LLC amended their first lien credit agreement with JPMorgan Chase Bank and a group of refinancing term lenders, securing $1.42 billion in new repriced term loans. The amendment red...
Business Operations and StrategyPrivate Placements and FinancingRegulatory Filings and Compliance
Sotera Health Shifts to Conventional Governance After Sponsors Exit
Neutral
May 13, 2026
On May 11, 2026, Sotera Health entered into an underwriting agreement with certain selling stockholders and Goldman Sachs Co. LLC for the secondary sale of 31,838,253 shares of its common stock at $15.168 per share. On May 13, 2026, these selling...
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.