SOTERA HEALTH CO (SHC) Stock Fundamental Analysis
NASDAQ:SHC - Nasdaq - US83601L1026 - Common Stock - Currency: USD
Taking everything into account, SHC scores 5 out of 10 in our fundamental rating. SHC was compared to 55 industry peers in the Life Sciences Tools & Services industry. SHC has an excellent profitability rating, but there are concerns on its financial health. SHC has a decent growth rate and is not valued too expensively.
1. Profitability
1.1 Basic Checks
In the past year SHC was profitable.
In the past year SHC had a positive cash flow from operations.
The reported net income has been mixed in the past 5 years: SHC reported negative net income in multiple years.
SHC had a positive operating cash flow in 4 of the past 5 years.
1.2 Ratios
With a decent Return On Assets value of 1.00%, SHC is doing good in the industry, outperforming 69.09% of the companies in the same industry.
SHC's Return On Equity of 7.51% is fine compared to the rest of the industry. SHC outperforms 80.00% of its industry peers.
SHC's Return On Invested Capital of 9.76% is amongst the best of the industry. SHC outperforms 83.64% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for SHC is significantly below the industry average of 13.60%.
The 3 year average ROIC (8.04%) for SHC is below the current ROIC(9.76%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 1% | ||
| ROE | 7.51% | ||
| ROIC | 9.76% |
ROA(3y)-1.47%
ROA(5y)-0.34%
ROE(3y)-14.75%
ROE(5y)-6.62%
ROIC(3y)8.04%
ROIC(5y)7.61%
1.3 Margins
SHC has a Profit Margin of 2.29%. This is in the better half of the industry: SHC outperforms 69.09% of its industry peers.
SHC's Profit Margin has declined in the last couple of years.
The Operating Margin of SHC (26.18%) is better than 96.36% of its industry peers.
In the last couple of years the Operating Margin of SHC has grown nicely.
SHC has a Gross Margin of 54.45%. This is in the better half of the industry: SHC outperforms 65.45% of its industry peers.
In the last couple of years the Gross Margin of SHC has grown nicely.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 26.18% | ||
| PM (TTM) | 2.29% | ||
| GM | 54.45% |
OM growth 3Y-0.64%
OM growth 5Y2.13%
PM growth 3Y-31.23%
PM growth 5YN/A
GM growth 3Y-0.57%
GM growth 5Y1.5%
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), SHC is destroying value.
Compared to 1 year ago, SHC has more shares outstanding
The number of shares outstanding for SHC has been increased compared to 5 years ago.
The debt/assets ratio for SHC is higher compared to a year ago.
2.2 Solvency
Based on the Altman-Z score of 1.41, we must say that SHC is in the distress zone and has some risk of bankruptcy.
With a Altman-Z score value of 1.41, SHC is not doing good in the industry: 60.00% of the companies in the same industry are doing better.
The Debt to FCF ratio of SHC is 21.89, which is on the high side as it means it would take SHC, 21.89 years of fcf income to pay off all of its debts.
SHC's Debt to FCF ratio of 21.89 is in line compared to the rest of the industry. SHC outperforms 52.73% of its industry peers.
SHC has a Debt/Equity ratio of 5.55. This is a high value indicating a heavy dependency on external financing.
With a Debt to Equity ratio value of 5.55, SHC is not doing good in the industry: 90.91% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 5.55 | ||
| Debt/FCF | 21.89 | ||
| Altman-Z | 1.41 |
ROIC/WACC0.91
WACC10.75%
2.3 Liquidity
A Current Ratio of 2.46 indicates that SHC has no problem at all paying its short term obligations.
SHC has a Current ratio of 2.46. This is comparable to the rest of the industry: SHC outperforms 47.27% of its industry peers.
A Quick Ratio of 2.19 indicates that SHC has no problem at all paying its short term obligations.
Looking at the Quick ratio, with a value of 2.19, SHC is in line with its industry, outperforming 50.91% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2.46 | ||
| Quick Ratio | 2.19 |
3. Growth
3.1 Past
The earnings per share for SHC have decreased strongly by -12.35% in the last year.
The Earnings Per Share has been decreasing by -7.34% on average over the past years.
SHC shows a strong growth in Revenue. In the last year, the Revenue has grown by 25.82%.
Measured over the past years, SHC shows a small growth in Revenue. The Revenue has been growing by 7.17% on average per year.
EPS 1Y (TTM)-12.35%
EPS 3Y-7.34%
EPS 5YN/A
EPS Q2Q%7.69%
Revenue 1Y (TTM)25.82%
Revenue growth 3Y5.71%
Revenue growth 5Y7.17%
Sales Q2Q%2.56%
3.2 Future
SHC is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 12.75% yearly.
SHC is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 6.85% yearly.
EPS Next Y7.93%
EPS Next 2Y10.82%
EPS Next 3Y10.95%
EPS Next 5Y12.75%
Revenue Next Year3.69%
Revenue Next 2Y4.79%
Revenue Next 3Y5.32%
Revenue Next 5Y6.85%
3.3 Evolution
The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
The Revenue growth rate is stable: in the next years the growth will be about the same than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
A Price/Earnings ratio of 16.54 indicates a correct valuation of SHC.
SHC's Price/Earnings ratio is rather cheap when compared to the industry. SHC is cheaper than 87.27% of the companies in the same industry.
The average S&P500 Price/Earnings ratio is at 27.45. SHC is valued slightly cheaper when compared to this.
The Price/Forward Earnings ratio is 13.66, which indicates a correct valuation of SHC.
Compared to the rest of the industry, the Price/Forward Earnings ratio of SHC indicates a rather cheap valuation: SHC is cheaper than 90.91% of the companies listed in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 21.90, SHC is valued a bit cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 16.54 | ||
| Fwd PE | 13.66 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, SHC is valued cheaper than 98.18% of the companies in the same industry.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of SHC indicates a somewhat cheap valuation: SHC is cheaper than 69.09% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 31.49 | ||
| EV/EBITDA | 10.31 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates SHC does not grow enough to justify the current Price/Earnings ratio.
SHC has a very decent profitability rating, which may justify a higher PE ratio.
PEG (NY)2.09
PEG (5Y)N/A
EPS Next 2Y10.82%
EPS Next 3Y10.95%
5. Dividend
5.1 Amount
No dividends for SHC!.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
11.745
+0.1 (+0.9%)
Chartmill FA Rating
GICS SectorHealth Care
GICS IndustryGroupPharmaceuticals, Biotechnology & Life Sciences
GICS IndustryLife Sciences Tools & Services
Earnings (Last)
Earnings (Next)
Inst Owners50.34%
Inst Owner Change2.22%
Ins Owners2.51%
Ins Owner Change15.67%
Market Cap3.33B
Analysts80
Price Target15.13 (28.82%)
Short Float %8.37%
Short Ratio9.95
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
Yearly DividendN/A
Dividend Growth(5Y)N/A
DPN/A
Div Incr Years0
Div Non Decr Years0
Ex-DateN/A
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)8.41%
Min EPS beat(2)3.1%
Max EPS beat(2)13.73%
EPS beat(4)3
Avg EPS beat(4)5.75%
Min EPS beat(4)-8.09%
Max EPS beat(4)14.27%
EPS beat(8)6
Avg EPS beat(8)6.22%
EPS beat(12)9
Avg EPS beat(12)5.77%
EPS beat(16)13
Avg EPS beat(16)6.86%
Revenue beat(2)1
Avg Revenue beat(2)0.65%
Min Revenue beat(2)-1.22%
Max Revenue beat(2)2.53%
Revenue beat(4)2
Avg Revenue beat(4)-2.22%
Min Revenue beat(4)-11.65%
Max Revenue beat(4)2.53%
Revenue beat(8)4
Avg Revenue beat(8)-1.32%
Revenue beat(12)6
Avg Revenue beat(12)-0.75%
Revenue beat(16)10
Avg Revenue beat(16)0.3%
PT rev (1m)-2.04%
PT rev (3m)-3.13%
EPS NQ rev (1m)-0.51%
EPS NQ rev (3m)-5.89%
EPS NY rev (1m)-0.2%
EPS NY rev (3m)1.2%
Revenue NQ rev (1m)-0.11%
Revenue NQ rev (3m)-1.83%
Revenue NY rev (1m)-0.09%
Revenue NY rev (3m)0.61%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 16.54 | ||
| Fwd PE | 13.66 | ||
| P/S | 2.46 | ||
| P/FCF | 31.49 | ||
| P/OCF | 12.35 | ||
| P/B | 8.05 | ||
| P/tB | N/A | ||
| EV/EBITDA | 10.31 |
EPS(TTM)0.71
EY6.05%
EPS(NY)0.86
Fwd EY7.32%
FCF(TTM)0.37
FCFY3.18%
OCF(TTM)0.95
OCFY8.1%
SpS4.77
BVpS1.46
TBVpS-3.4
PEG (NY)2.09
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 1% | ||
| ROE | 7.51% | ||
| ROCE | 12.35% | ||
| ROIC | 9.76% | ||
| ROICexc | 10.91% | ||
| ROICexgc | 23.57% | ||
| OM | 26.18% | ||
| PM (TTM) | 2.29% | ||
| GM | 54.45% | ||
| FCFM | 7.81% |
ROA(3y)-1.47%
ROA(5y)-0.34%
ROE(3y)-14.75%
ROE(5y)-6.62%
ROIC(3y)8.04%
ROIC(5y)7.61%
ROICexc(3y)9.2%
ROICexc(5y)8.42%
ROICexgc(3y)32.15%
ROICexgc(5y)28.54%
ROCE(3y)10.18%
ROCE(5y)9.64%
ROICexcg growth 3Y-8.13%
ROICexcg growth 5Y-2.77%
ROICexc growth 3Y3.93%
ROICexc growth 5Y7.64%
OM growth 3Y-0.64%
OM growth 5Y2.13%
PM growth 3Y-31.23%
PM growth 5YN/A
GM growth 3Y-0.57%
GM growth 5Y1.5%
F-Score5
Asset Turnover0.44
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 5.55 | ||
| Debt/FCF | 21.89 | ||
| Debt/EBITDA | 4.43 | ||
| Cap/Depr | 100.05% | ||
| Cap/Sales | 12.11% | ||
| Interest Coverage | 2.25 | ||
| Cash Conversion | 52.05% | ||
| Profit Quality | 340.71% | ||
| Current Ratio | 2.46 | ||
| Quick Ratio | 2.19 | ||
| Altman-Z | 1.41 |
F-Score5
WACC10.75%
ROIC/WACC0.91
Cap/Depr(3y)123.61%
Cap/Depr(5y)95.16%
Cap/Sales(3y)18.31%
Cap/Sales(5y)14.49%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)-12.35%
EPS 3Y-7.34%
EPS 5YN/A
EPS Q2Q%7.69%
EPS Next Y7.93%
EPS Next 2Y10.82%
EPS Next 3Y10.95%
EPS Next 5Y12.75%
Revenue 1Y (TTM)25.82%
Revenue growth 3Y5.71%
Revenue growth 5Y7.17%
Sales Q2Q%2.56%
Revenue Next Year3.69%
Revenue Next 2Y4.79%
Revenue Next 3Y5.32%
Revenue Next 5Y6.85%
EBIT growth 1Y19.62%
EBIT growth 3Y5.04%
EBIT growth 5Y9.46%
EBIT Next Year25.83%
EBIT Next 3Y12.69%
EBIT Next 5Y11.52%
FCF growth 1Y51.27%
FCF growth 3Y-36.88%
FCF growth 5Y-13.23%
OCF growth 1Y3.09%
OCF growth 3Y-7.31%
OCF growth 5Y8.51%