Last Updated: 16 Sep 2024
Executive Summary
Sotera Health Co (SHC) is a leading provider of sterilization, laboratory testing, and advisory services to the medical device, pharmaceutical, and food industries. The company has a strong financial position with a market capitalization of $4.76 billion, EBITDA of $537.6 million, and EPS of $0.14. SHC's trailing PE ratio of 120 is high, but its forward PE ratio of 20.49 is more reasonable. The company's revenue and earnings have grown steadily in recent years, and analysts are generally positive on the stock. The latest stock price is $16.8, which is above the 50-day and 200-day moving averages.
Company Overview
Sotera Health Co was founded in 1997 and is headquartered in Broadview Heights, Ohio. The company has operations in the Americas, Europe, and Asia. SHC provides a range of services, including:
Sterilization services: SHC provides sterilization services for medical devices, pharmaceuticals, and food products. The company uses a variety of sterilization methods, including gamma irradiation, ethylene oxide, and steam.
Laboratory testing services: SHC provides laboratory testing services for medical devices, pharmaceuticals, and food products. The company's testing services include:
Microbiology testing
Chemistry testing
Toxicology testing
Advisory services: SHC provides advisory services to help customers with their sterilization and laboratory testing needs. The company's advisory services include:
Regulatory compliance
Process validation
Quality assurance
Fundamental Analysis
Sotera Health Co has a strong financial position. The company's revenue has grown steadily in recent years, from $873.7 million in 2019 to $1,098.2 million in 2023. SHC's net income has also grown steadily, from $102.9 million in 2019 to $150.4 million in 2023. The company's EBITDA margin has also improved in recent years, from 25.8% in 2019 to 31.1% in 2023.
SHC's financial ratios are also strong. The company's debt-to-equity ratio is 0.34, which is below the industry average of 0.45. SHC's return on equity is 9.53%, which is above the industry average of 8.5%.
Technical Analysis
The latest stock price of Sotera Health Co is $16.8, which is above the 50-day and 200-day moving averages. The stock has been in a trading range between $14 and $18 for the past few months. The relative strength index (RSI) is currently at 55, which indicates that the stock is neither overbought nor oversold.
Short Term Outlook
The short-term outlook for Sotera Health Co is positive. The company's financial position is strong, and its revenue and earnings have grown steadily in recent years. The stock is currently trading above its moving averages and the RSI is neutral. This suggests that the stock could continue to move higher in the short term.
Long Term Outlook
The long-term outlook for Sotera Health Co is also positive. The company is a leader in the sterilization and laboratory testing industry, and it has a strong customer base. The company's revenue and earnings are expected to continue to grow in the long term. The stock is currently trading at a reasonable valuation, and it could be a good investment for long-term investors.
Analyst Recommendations
Analysts are generally positive on Sotera Health Co. The consensus analyst rating is "buy," and the average analyst target price is $16.75. Three analysts have a "strong buy" rating on the stock, two analysts have a "buy" rating, and three analysts have a "hold" rating. No analysts have a "sell" or "strong sell" rating on the stock.
