18.61 USD
-0.29 (-1.53%)
We assign a fundamental rating of 4 out of 10 to SHC. SHC was compared to 57 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
- SHC had positive earnings in the past year.
- In the past year SHC had a positive cash flow from operations.
- In multiple years SHC reported negative net income over the last 5 years.
- SHC had a positive operating cash flow in 4 of the past 5 years.
1.2 Ratios
- SHC's Return On Assets of 1.74% is fine compared to the rest of the industry. SHC outperforms 70.18% of its industry peers.
- The Return On Equity of SHC (10.07%) is better than 80.70% of its industry peers.
- The Return On Invested Capital of SHC (9.23%) is better than 82.46% of its industry peers.
- The Average Return On Invested Capital over the past 3 years for SHC is significantly below the industry average of 13.75%.
- The last Return On Invested Capital (9.23%) for SHC is above the 3 year average (8.04%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 1.74% | ||
| ROE | 10.07% | ||
| ROIC | 9.23% |
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 (4.82%) than 71.93% of its industry peers.
- SHC's Profit Margin has declined in the last couple of years.
- SHC's Operating Margin of 29.89% is amongst the best of the industry. SHC outperforms 100.00% of its industry peers.
- SHC's Operating Margin has improved in the last couple of years.
- The Gross Margin of SHC (55.98%) is better than 70.18% of its industry peers.
- SHC's Gross Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 29.89% | ||
| PM (TTM) | 4.82% | ||
| GM | 55.98% |
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.
- SHC has a worse debt/assets ratio than last year.
2.2 Solvency
- SHC has an Altman-Z score of 1.82. This is not the best score and indicates that SHC is in the grey zone with still only limited risk for bankruptcy at the moment.
- SHC has a Altman-Z score of 1.82. This is comparable to the rest of the industry: SHC outperforms 42.11% of its industry peers.
- The Debt to FCF ratio of SHC is 25.87, which is on the high side as it means it would take SHC, 25.87 years of fcf income to pay off all of its debts.
- Looking at the Debt to FCF ratio, with a value of 25.87, SHC is in line with its industry, outperforming 57.89% of the companies in the same industry.
- A Debt/Equity ratio of 4.04 is on the high side and indicates that SHC has dependencies on debt financing.
- Looking at the Debt to Equity ratio, with a value of 4.04, SHC is doing worse than 91.23% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 4.04 | ||
| Debt/FCF | 25.87 | ||
| Altman-Z | 1.82 |
ROIC/WACC0.82
WACC11.24%
2.3 Liquidity
- A Current Ratio of 2.38 indicates that SHC has no problem at all paying its short term obligations.
- The Current ratio of SHC (2.38) is comparable to the rest of the industry.
- A Quick Ratio of 2.16 indicates that SHC has no problem at all paying its short term obligations.
- SHC has a Quick ratio (2.16) which is in line with its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2.38 | ||
| Quick Ratio | 2.16 |
3. Growth
3.1 Past
- The Earnings Per Share has grown by an nice 8.00% over the past year.
- SHC shows a decrease in Earnings Per Share. Measured over the last years, the EPS has been decreasing by -7.34% yearly.
- The Revenue for SHC has decreased by -15.95% in the past year. This is quite bad
- SHC shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 7.17% yearly.
EPS 1Y (TTM)8%
EPS 3Y-7.34%
EPS 5YN/A
EPS Q2Q%52.94%
Revenue 1Y (TTM)-15.95%
Revenue growth 3Y5.71%
Revenue growth 5Y7.17%
Sales Q2Q%9.05%
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 15.65% 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 Y20.58%
EPS Next 2Y16.69%
EPS Next 3Y14.79%
EPS Next 5Y15.65%
Revenue Next Year5.31%
Revenue Next 2Y5.6%
Revenue Next 3Y5.78%
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 22.98 indicates a rather expensive valuation of SHC.
- Based on the Price/Earnings ratio, SHC is valued cheaply inside the industry as 85.96% of the companies are valued more expensively.
- The average S&P500 Price/Earnings ratio is at 27.30. SHC is around the same levels.
- A Price/Forward Earnings ratio of 19.52 indicates a rather expensive valuation of SHC.
- Based on the Price/Forward Earnings ratio, SHC is valued cheaply inside the industry as 92.98% of the companies are valued more expensively.
- SHC is valuated at similar levels of the S&P average when we compare the Price/Forward Earnings ratio to 24.32, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 22.98 | ||
| Fwd PE | 19.52 |
4.2 Price Multiples
- 91.23% of the companies in the same industry are more expensive than SHC, based on the Enterprise Value to EBITDA ratio.
- Based on the Price/Free Cash Flow ratio, SHC is valued a bit cheaper than the industry average as 61.40% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 61.04 | ||
| EV/EBITDA | 14.97 |
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.
- A more expensive valuation may be justified as SHC's earnings are expected to grow with 14.79% in the coming years.
PEG (NY)1.12
PEG (5Y)N/A
EPS Next 2Y16.69%
EPS Next 3Y14.79%
5. Dividend
5.1 Amount
- No dividends for SHC!.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0% |
SOTERA HEALTH CO / SHC FAQ
What is the fundamental rating for SHC stock?
ChartMill assigns a fundamental rating of 4 / 10 to SHC.
What is the valuation status of SOTERA HEALTH CO (SHC) stock?
ChartMill assigns a valuation rating of 5 / 10 to SOTERA HEALTH CO (SHC). This can be considered as Fairly Valued.
What is the profitability of SHC stock?
SOTERA HEALTH CO (SHC) has a profitability rating of 7 / 10.
How financially healthy is SOTERA HEALTH CO?
The financial health rating of SOTERA HEALTH CO (SHC) is 3 / 10.