SOTERA HEALTH CO (SHC) Stock Fundamental Analysis
USA - NASDAQ:SHC - US83601L1026 - Common Stock
15.97 USD
-0.28 (-1.72%)
15.97 USD
0 (0%)
Overall SHC gets a fundamental rating of 4 out of 10. We evaluated SHC against 55 industry peers in the Life Sciences Tools & Services industry. SHC scores excellent on profitability, but there are concerns on its financial health. SHC has a valuation in line with the averages, but it does not seem to be growing.
1. Profitability
1.1 Basic Checks
SHC had positive earnings in the past year.
SHC had a positive operating cash flow in the past year.
The reported net income has been mixed in the past 5 years: SHC reported negative net income in multiple years.
Of the past 5 years SHC 4 years had a positive operating cash flow.
1.2 Ratios
With a decent Return On Assets value of 0.75%, SHC is doing good in the industry, outperforming 63.64% of the companies in the same industry.
Looking at the Return On Equity, with a value of 4.70%, SHC is in the better half of the industry, outperforming 72.73% of the companies in the same industry.
SHC has a Return On Invested Capital of 8.33%. This is amongst the best in the industry. SHC outperforms 81.82% of its industry peers.
SHC had an Average Return On Invested Capital over the past 3 years of 8.04%. This is significantly below the industry average of 15.96%.
The last Return On Invested Capital (8.33%) for SHC is above the 3 year average (8.04%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 0.75% | ||
| ROE | 4.7% | ||
| ROIC | 8.33% |
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 better Profit Margin (2.13%) than 63.64% of its industry peers.
In the last couple of years the Profit Margin of SHC has declined.
SHC has a Operating Margin of 27.85%. This is amongst the best in the industry. SHC outperforms 98.18% of its industry peers.
SHC's Operating Margin has improved in the last couple of years.
With a decent Gross Margin value of 55.53%, SHC is doing good in the industry, outperforming 67.27% of the companies in the same industry.
SHC's Gross Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 27.85% | ||
| PM (TTM) | 2.13% | ||
| GM | 55.53% |
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.
The number of shares outstanding for SHC has been increased compared to 1 year ago.
Compared to 5 years ago, SHC has more shares outstanding
Compared to 1 year ago, SHC has a worse debt to assets ratio.
2.2 Solvency
SHC has an Altman-Z score of 1.54. This is a bad value and indicates that SHC is not financially healthy and even has some risk of bankruptcy.
SHC has a Altman-Z score of 1.54. This is comparable to the rest of the industry: SHC outperforms 45.45% of its industry peers.
The Debt to FCF ratio of SHC is 20.55, which is on the high side as it means it would take SHC, 20.55 years of fcf income to pay off all of its debts.
Looking at the Debt to FCF ratio, with a value of 20.55, SHC is in line with its industry, outperforming 56.36% of the companies in the same industry.
SHC has a Debt/Equity ratio of 4.49. This is a high value indicating a heavy dependency on external financing.
SHC's Debt to Equity ratio of 4.49 is on the low side compared to the rest of the industry. SHC is outperformed by 92.73% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 4.49 | ||
| Debt/FCF | 20.55 | ||
| Altman-Z | 1.54 |
ROIC/WACC0.78
WACC10.61%
2.3 Liquidity
SHC has a Current Ratio of 2.47. This indicates that SHC is financially healthy and has no problem in meeting its short term obligations.
SHC's Current ratio of 2.47 is in line compared to the rest of the industry. SHC outperforms 47.27% of its industry peers.
A Quick Ratio of 2.23 indicates that SHC has no problem at all paying its short term obligations.
With a Quick ratio value of 2.23, SHC perfoms like the industry average, outperforming 50.91% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2.47 | ||
| Quick Ratio | 2.23 |
3. Growth
3.1 Past
SHC shows a slight negative growth in Earnings Per Share. In the last year, the EPS has decreased by -8.86%.
Measured over the past years, SHC shows a decrease in Earnings Per Share. The EPS has been decreasing by -7.34% on average per year.
SHC shows a very negative growth in Revenue. In the last year, the Revenue has decreased by -16.48%.
The Revenue has been growing slightly by 7.17% on average over the past years.
EPS 1Y (TTM)-8.86%
EPS 3Y-7.34%
EPS 5YN/A
EPS Q2Q%5.26%
Revenue 1Y (TTM)-16.48%
Revenue growth 3Y5.71%
Revenue growth 5Y7.17%
Sales Q2Q%23.8%
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 13.74% 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 Y13.43%
EPS Next 2Y13.03%
EPS Next 3Y12.31%
EPS Next 5Y13.74%
Revenue Next Year5.13%
Revenue Next 2Y5.56%
Revenue Next 3Y5.75%
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.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is stable.
4. Valuation
4.1 Price/Earnings Ratio
With a Price/Earnings ratio of 22.18, SHC is valued on the expensive side.
SHC's Price/Earnings ratio is a bit cheaper when compared to the industry. SHC is cheaper than 80.00% of the companies in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 27.41, SHC is valued at the same level.
SHC is valuated rather expensively with a Price/Forward Earnings ratio of 17.86.
83.64% of the companies in the same industry are more expensive than SHC, based on the Price/Forward Earnings ratio.
SHC is valuated rather cheaply when we compare the Price/Forward Earnings ratio to 22.88, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 22.18 | ||
| Fwd PE | 17.86 |
4.2 Price Multiples
89.09% of the companies in the same industry are more expensive than SHC, based on the Enterprise Value to EBITDA ratio.
61.82% of the companies in the same industry are more expensive than SHC, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 40.25 | ||
| EV/EBITDA | 13.8 |
4.3 Compensation for Growth
The PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
The decent profitability rating of SHC may justify a higher PE ratio.
SHC's earnings are expected to grow with 12.31% in the coming years. This may justify a more expensive valuation.
PEG (NY)1.65
PEG (5Y)N/A
EPS Next 2Y13.03%
EPS Next 3Y12.31%
5. Dividend
5.1 Amount
SHC does not give a dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
15.97
-0.28 (-1.72%)
Chartmill FA Rating
GICS SectorHealth Care
GICS IndustryGroupPharmaceuticals, Biotechnology & Life Sciences
GICS IndustryLife Sciences Tools & Services
Earnings (Last)
Earnings (Next)
Inst Owners49.93%
Inst Owner Change0.5%
Ins Owners2.51%
Ins Owner Change1.87%
Market Cap4.54B
Analysts80
Price Target16.73 (4.76%)
Short Float %6.52%
Short Ratio6.79
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)14.14%
Min EPS beat(2)13.73%
Max EPS beat(2)14.56%
EPS beat(4)3
Avg EPS beat(4)5.82%
Min EPS beat(4)-8.09%
Max EPS beat(4)14.56%
EPS beat(8)6
Avg EPS beat(8)5.7%
EPS beat(12)9
Avg EPS beat(12)6.13%
EPS beat(16)13
Avg EPS beat(16)6.3%
Revenue beat(2)2
Avg Revenue beat(2)4.08%
Min Revenue beat(2)2.53%
Max Revenue beat(2)5.63%
Revenue beat(4)3
Avg Revenue beat(4)2.1%
Min Revenue beat(4)-1.22%
Max Revenue beat(4)5.63%
Revenue beat(8)5
Avg Revenue beat(8)-0.32%
Revenue beat(12)6
Avg Revenue beat(12)-0.52%
Revenue beat(16)10
Avg Revenue beat(16)0.04%
PT rev (1m)9.97%
PT rev (3m)8.3%
EPS NQ rev (1m)0%
EPS NQ rev (3m)6.97%
EPS NY rev (1m)5.1%
EPS NY rev (3m)4.89%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)1.98%
Revenue NY rev (1m)1.3%
Revenue NY rev (3m)1.3%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 22.18 | ||
| Fwd PE | 17.86 | ||
| P/S | 4.03 | ||
| P/FCF | 40.25 | ||
| P/OCF | 17.05 | ||
| P/B | 8.87 | ||
| P/tB | N/A | ||
| EV/EBITDA | 13.8 |
EPS(TTM)0.72
EY4.51%
EPS(NY)0.89
Fwd EY5.6%
FCF(TTM)0.4
FCFY2.48%
OCF(TTM)0.94
OCFY5.87%
SpS3.96
BVpS1.8
TBVpS-3.12
PEG (NY)1.65
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 0.75% | ||
| ROE | 4.7% | ||
| ROCE | 10.54% | ||
| ROIC | 8.33% | ||
| ROICexc | 9.38% | ||
| ROICexgc | 19.95% | ||
| OM | 27.85% | ||
| PM (TTM) | 2.13% | ||
| GM | 55.53% | ||
| FCFM | 10.02% |
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 Turnover0.35
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 4.49 | ||
| Debt/FCF | 20.55 | ||
| Debt/EBITDA | 4.87 | ||
| Cap/Depr | 96.36% | ||
| Cap/Sales | 13.64% | ||
| Interest Coverage | 1.83 | ||
| Cash Conversion | 56.34% | ||
| Profit Quality | 469.47% | ||
| Current Ratio | 2.47 | ||
| Quick Ratio | 2.23 | ||
| Altman-Z | 1.54 |
F-Score5
WACC10.61%
ROIC/WACC0.78
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)-8.86%
EPS 3Y-7.34%
EPS 5YN/A
EPS Q2Q%5.26%
EPS Next Y13.43%
EPS Next 2Y13.03%
EPS Next 3Y12.31%
EPS Next 5Y13.74%
Revenue 1Y (TTM)-16.48%
Revenue growth 3Y5.71%
Revenue growth 5Y7.17%
Sales Q2Q%23.8%
Revenue Next Year5.13%
Revenue Next 2Y5.56%
Revenue Next 3Y5.75%
Revenue Next 5Y6.85%
EBIT growth 1Y-13.8%
EBIT growth 3Y5.04%
EBIT growth 5Y9.46%
EBIT Next Year25.74%
EBIT Next 3Y12.6%
EBIT Next 5Y12.14%
FCF growth 1Y132.96%
FCF growth 3Y-36.88%
FCF growth 5Y-13.23%
OCF growth 1Y300.08%
OCF growth 3Y-7.31%
OCF growth 5Y8.51%