SOTERA HEALTH CO (SHC) Stock Fundamental Analysis
NASDAQ:SHC - Nasdaq - US83601L1026 - Common Stock - Currency: USD
Overall SHC gets a fundamental rating of 4 out of 10. We evaluated SHC against 56 industry peers in the Life Sciences Tools & Services industry. SHC scores excellent on profitability, but there are concerns on its financial health. SHC is valued correctly, 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.
In multiple years SHC reported negative net income over the last 5 years.
Of the past 5 years SHC 4 years had a positive operating cash flow.
1.2 Ratios
The Return On Assets of SHC (2.44%) is better than 75.44% of its industry peers.
Looking at the Return On Equity, with a value of 16.33%, SHC belongs to the top of the industry, outperforming 91.23% of the companies in the same industry.
The Return On Invested Capital of SHC (9.84%) is better than 89.47% of its industry peers.
The Average Return On Invested Capital over the past 3 years for SHC is below the industry average of 10.21%.
The last Return On Invested Capital (9.84%) for SHC is above the 3 year average (7.90%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.44% | ||
| ROE | 16.33% | ||
| ROIC | 9.84% |
ROA(3y)-0.57%
ROA(5y)-0.79%
ROE(3y)-11.83%
ROE(5y)N/A
ROIC(3y)7.9%
ROIC(5y)7.2%
1.3 Margins
SHC has a Profit Margin of 5.61%. This is in the better half of the industry: SHC outperforms 75.44% of its industry peers.
SHC has a better Operating Margin (26.86%) than 96.49% of its industry peers.
In the last couple of years the Operating Margin of SHC has grown nicely.
Looking at the Gross Margin, with a value of 54.44%, SHC is in the better half of the industry, outperforming 68.42% of the companies in the same industry.
SHC's Gross Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 26.86% | ||
| PM (TTM) | 5.61% | ||
| GM | 54.44% |
OM growth 3Y1.54%
OM growth 5Y3.47%
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y0.48%
GM growth 5Y2.81%
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 remains at a similar level compared to 1 year ago.
SHC has more shares outstanding than it did 5 years ago.
SHC has a worse debt/assets ratio than last year.
2.2 Solvency
Based on the Altman-Z score of 1.54, we must say that SHC is in the distress zone and has some risk of bankruptcy.
SHC has a Altman-Z score (1.54) which is in line with its industry peers.
The Debt to FCF ratio of SHC is 22.47, which is on the high side as it means it would take SHC, 22.47 years of fcf income to pay off all of its debts.
SHC has a Debt to FCF ratio of 22.47. This is comparable to the rest of the industry: SHC outperforms 57.89% of its industry peers.
A Debt/Equity ratio of 4.91 is on the high side and indicates that SHC has dependencies on debt financing.
SHC's Debt to Equity ratio of 4.91 is on the low side compared to the rest of the industry. SHC is outperformed by 91.23% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 4.91 | ||
| Debt/FCF | 22.47 | ||
| Altman-Z | 1.54 |
ROIC/WACC0.86
WACC11.5%
2.3 Liquidity
SHC has a Current Ratio of 2.88. This indicates that SHC is financially healthy and has no problem in meeting its short term obligations.
SHC has a Current ratio (2.88) which is comparable to the rest of the industry.
A Quick Ratio of 2.61 indicates that SHC has no problem at all paying its short term obligations.
With a Quick ratio value of 2.61, SHC perfoms like the industry average, outperforming 52.63% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2.88 | ||
| Quick Ratio | 2.61 |
3. Growth
3.1 Past
SHC shows a slight negative growth in Earnings Per Share. In the last year, the EPS has decreased by -6.25%.
The Revenue has grown by 38.15% in the past year. This is a very strong growth!
SHC shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 7.06% yearly.
EPS 1Y (TTM)-6.25%
EPS 3YN/A
EPS 5YN/A
EPS Q2Q%-19.05%
Revenue 1Y (TTM)38.15%
Revenue growth 3Y8.65%
Revenue growth 5Y7.06%
Sales Q2Q%8.47%
3.2 Future
Based on estimates for the next years, SHC will show a small growth in Earnings Per Share. The EPS will grow by 3.64% on average per year.
Based on estimates for the next years, SHC will show a small growth in Revenue. The Revenue will grow by 6.60% on average per year.
EPS Next Y-13.58%
EPS Next 2Y-1.09%
EPS Next 3Y3.64%
EPS Next 5YN/A
Revenue Next Year5.7%
Revenue Next 2Y5.5%
Revenue Next 3Y5.75%
Revenue Next 5Y6.6%
3.3 Evolution
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
SHC is valuated rather expensively with a Price/Earnings ratio of 18.03.
SHC's Price/Earnings ratio is rather cheap when compared to the industry. SHC is cheaper than 92.98% of the companies in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 29.62, SHC is valued a bit cheaper.
The Price/Forward Earnings ratio is 17.06, which indicates a rather expensive current valuation of SHC.
Based on the Price/Forward Earnings ratio, SHC is valued cheaply inside the industry as 87.72% of the companies are valued more expensively.
When comparing the Price/Forward Earnings ratio of SHC to the average of the S&P500 Index (22.70), we can say SHC is valued slightly cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 18.03 | ||
| Fwd PE | 17.06 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of SHC indicates a rather cheap valuation: SHC is cheaper than 98.25% of the companies listed 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 70.18% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 36.98 | ||
| EV/EBITDA | 11 |
4.3 Compensation for Growth
The decent profitability rating of SHC may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)N/A
EPS Next 2Y-1.09%
EPS Next 3Y3.64%
5. Dividend
5.1 Amount
No dividends for SHC!.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
13.52
0 (0%)
Chartmill FA Rating
GICS SectorHealth Care
GICS IndustryGroupPharmaceuticals, Biotechnology & Life Sciences
GICS IndustryLife Sciences Tools & Services
Earnings (Last)
Earnings (Next)
Inst Owners50.7%
Inst Owner Change-98.94%
Ins Owners2.47%
Ins Owner Change-1.06%
Market Cap3.83B
Analysts78.46
Price Target16.38 (21.15%)
Short Float %4.94%
Short Ratio7.77
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)1
Avg EPS beat(2)3.09%
Min EPS beat(2)-8.09%
Max EPS beat(2)14.27%
EPS beat(4)2
Avg EPS beat(4)2.26%
Min EPS beat(4)-8.09%
Max EPS beat(4)14.27%
EPS beat(8)5
Avg EPS beat(8)5.05%
EPS beat(12)9
Avg EPS beat(12)5.64%
EPS beat(16)13
Avg EPS beat(16)8.24%
Revenue beat(2)1
Avg Revenue beat(2)-5.1%
Min Revenue beat(2)-11.65%
Max Revenue beat(2)1.46%
Revenue beat(4)3
Avg Revenue beat(4)-1.99%
Min Revenue beat(4)-11.65%
Max Revenue beat(4)1.66%
Revenue beat(8)4
Avg Revenue beat(8)-1.55%
Revenue beat(12)7
Avg Revenue beat(12)-0.61%
Revenue beat(16)11
Avg Revenue beat(16)0.45%
PT rev (1m)-0.77%
PT rev (3m)-7.84%
EPS NQ rev (1m)-1.3%
EPS NQ rev (3m)-3.26%
EPS NY rev (1m)-0.02%
EPS NY rev (3m)-1.79%
Revenue NQ rev (1m)-0.33%
Revenue NQ rev (3m)-0.33%
Revenue NY rev (1m)0.09%
Revenue NY rev (3m)-0.18%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 18.03 | ||
| Fwd PE | 17.06 | ||
| P/S | 2.8 | ||
| P/FCF | 36.98 | ||
| P/OCF | 13.6 | ||
| P/B | 8.14 | ||
| P/tB | N/A | ||
| EV/EBITDA | 11 |
EPS(TTM)0.75
EY5.55%
EPS(NY)0.79
Fwd EY5.86%
FCF(TTM)0.37
FCFY2.7%
OCF(TTM)0.99
OCFY7.35%
SpS4.83
BVpS1.66
TBVpS-3.46
PEG (NY)N/A
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.44% | ||
| ROE | 16.33% | ||
| ROCE | 12.45% | ||
| ROIC | 9.84% | ||
| ROICexc | 10.98% | ||
| ROICexgc | 24.27% | ||
| OM | 26.86% | ||
| PM (TTM) | 5.61% | ||
| GM | 54.44% | ||
| FCFM | 7.57% |
ROA(3y)-0.57%
ROA(5y)-0.79%
ROE(3y)-11.83%
ROE(5y)N/A
ROIC(3y)7.9%
ROIC(5y)7.2%
ROICexc(3y)8.87%
ROICexc(5y)7.86%
ROICexgc(3y)34.02%
ROICexgc(5y)29.12%
ROCE(3y)10%
ROCE(5y)9.11%
ROICexcg growth 3Y-1.65%
ROICexcg growth 5Y1.16%
ROICexc growth 3Y9.1%
ROICexc growth 5Y9.6%
OM growth 3Y1.54%
OM growth 5Y3.47%
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y0.48%
GM growth 5Y2.81%
F-Score8
Asset Turnover0.43
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 4.91 | ||
| Debt/FCF | 22.47 | ||
| Debt/EBITDA | 4.34 | ||
| Cap/Depr | 108.55% | ||
| Cap/Sales | 13.01% | ||
| Interest Coverage | 2.22 | ||
| Cash Conversion | 52.96% | ||
| Profit Quality | 134.83% | ||
| Current Ratio | 2.88 | ||
| Quick Ratio | 2.61 | ||
| Altman-Z | 1.54 |
F-Score8
WACC11.5%
ROIC/WACC0.86
Cap/Depr(3y)109.71%
Cap/Depr(5y)81.09%
Cap/Sales(3y)16.54%
Cap/Sales(5y)12.71%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)-6.25%
EPS 3YN/A
EPS 5YN/A
EPS Q2Q%-19.05%
EPS Next Y-13.58%
EPS Next 2Y-1.09%
EPS Next 3Y3.64%
EPS Next 5YN/A
Revenue 1Y (TTM)38.15%
Revenue growth 3Y8.65%
Revenue growth 5Y7.06%
Sales Q2Q%8.47%
Revenue Next Year5.7%
Revenue Next 2Y5.5%
Revenue Next 3Y5.75%
Revenue Next 5Y6.6%
EBIT growth 1Y57.87%
EBIT growth 3Y10.32%
EBIT growth 5Y10.77%
EBIT Next Year25.6%
EBIT Next 3Y12.58%
EBIT Next 5YN/A
FCF growth 1Y14.54%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y16.23%
OCF growth 3YN/A
OCF growth 5YN/A