SOTERA HEALTH CO (SHC)
US83601L1026 - Common Stock
We assign a fundamental rating of 4 out of 10 to SHC. SHC was compared to 55 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.
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
Looking at the Return On Assets, with a value of 2.44%, SHC is in the better half of the industry, outperforming 72.73% of the companies in the same industry.
With an excellent Return On Equity value of 16.33%, SHC belongs to the best of the industry, outperforming 87.27% of the companies in the same industry.
SHC has a Return On Invested Capital of 9.84%. This is amongst the best in the industry. SHC outperforms 89.09% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for SHC is below the industry average of 10.44%.
The 3 year average ROIC (7.90%) for SHC is below the current ROIC(9.84%), indicating increased profibility in the last year.
| 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 74.55% of its industry peers.
SHC has a Operating Margin of 26.86%. This is amongst the best in the industry. SHC outperforms 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 54.44%. This is in the better half of the industry: SHC outperforms 67.27% of its industry peers.
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.
SHC has about the same amout of shares outstanding than it did 1 year ago.
SHC has more shares outstanding than it did 5 years ago.
The debt/assets ratio for SHC is higher compared to a year ago.
2.2 Solvency
SHC has an Altman-Z score of 1.50. This is a bad value and indicates that SHC is not financially healthy and even has some risk of bankruptcy.
SHC's Altman-Z score of 1.50 is on the low side compared to the rest of the industry. SHC is outperformed by 60.00% of its industry peers.
SHC has a debt to FCF ratio of 22.47. This is a negative value and a sign of low solvency as SHC would need 22.47 years to pay back of all of its debts.
With a Debt to FCF ratio value of 22.47, SHC perfoms like the industry average, outperforming 56.36% of the companies in the same industry.
A Debt/Equity ratio of 4.91 is on the high side and indicates that SHC has dependencies on debt financing.
SHC has a Debt to Equity ratio of 4.91. This is amonst the worse of the industry: SHC underperforms 90.91% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 4.91 | ||
| Debt/FCF | 22.47 | ||
| Altman-Z | 1.5 |
ROIC/WACC0.82
WACC11.97%
2.3 Liquidity
A Current Ratio of 2.88 indicates that SHC has no problem at all paying its short term obligations.
SHC has a Current ratio of 2.88. This is comparable to the rest of the industry: SHC outperforms 49.09% of its industry peers.
SHC has a Quick Ratio of 2.61. This indicates that SHC is financially healthy and has no problem in meeting its short term obligations.
SHC has a Quick ratio (2.61) which is in line with its industry peers.
| 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%.
Looking at the last year, SHC shows a very strong growth in Revenue. The Revenue has grown by 38.15%.
The Revenue has been growing slightly by 7.06% on average over the past years.
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
The Earnings Per Share is expected to grow by 5.71% on average over the next years.
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-12%
EPS Next 2Y0.62%
EPS Next 3Y5.71%
EPS Next 5YN/A
Revenue Next Year5.89%
Revenue Next 2Y6%
Revenue Next 3Y6.25%
Revenue Next 5Y6.6%
3.3 Evolution
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
The Price/Earnings ratio is 17.09, which indicates a rather expensive current valuation of SHC.
Compared to the rest of the industry, the Price/Earnings ratio of SHC indicates a rather cheap valuation: SHC is cheaper than 98.18% of the companies listed in the same industry.
SHC's Price/Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 29.29.
Based on the Price/Forward Earnings ratio of 15.63, the valuation of SHC can be described as correct.
Based on the Price/Forward Earnings ratio, SHC is valued cheaply inside the industry as 92.73% of the companies are valued more expensively.
SHC is valuated rather cheaply when we compare the Price/Forward Earnings ratio to 24.01, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 17.09 | ||
| Fwd PE | 15.63 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, SHC is valued cheaply inside the industry as 100.00% of the companies are valued more expensively.
76.36% 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 | 35.07 | ||
| EV/EBITDA | 10.63 |
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 2Y0.62%
EPS Next 3Y5.71%
5. Dividend
5.1 Amount
No dividends for SHC!.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
SOTERA HEALTH CO
NASDAQ:SHC (11/22/2024, 8:04:40 PM)
After market: 12.7 -0.12 (-0.94%)12.82
+0.41 (+3.3%)
Chartmill FA Rating
GICS SectorHealth Care
GICS IndustryGroupPharmaceuticals, Biotechnology & Life Sciences
GICS IndustryLife Sciences Tools & Services
Earnings (Last)
Earnings (Next)
Inst Owners
Inst Owner Change
Ins Owners
Ins Owner Change
Market Cap3.63B
Analysts
Price Target
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
Dividend Growth(5Y)
DP
Div Incr Years
Div Non Decr Years
Ex-Date
Surprises & Revisions
EPS beat(2)
Avg EPS beat(2)
Min EPS beat(2)
Max EPS beat(2)
EPS beat(4)
Avg EPS beat(4)
Min EPS beat(4)
Max EPS beat(4)
EPS beat(8)
Avg EPS beat(8)
EPS beat(12)
Avg EPS beat(12)
EPS beat(16)
Avg EPS beat(16)
Revenue beat(2)
Avg Revenue beat(2)
Min Revenue beat(2)
Max Revenue beat(2)
Revenue beat(4)
Avg Revenue beat(4)
Min Revenue beat(4)
Max Revenue beat(4)
Revenue beat(8)
Avg Revenue beat(8)
Revenue beat(12)
Avg Revenue beat(12)
Revenue beat(16)
Avg Revenue beat(16)
PT rev (1m)
PT rev (3m)
EPS NQ rev (1m)
EPS NQ rev (3m)
EPS NY rev (1m)
EPS NY rev (3m)
Revenue NQ rev (1m)
Revenue NQ rev (3m)
Revenue NY rev (1m)
Revenue NY rev (3m)
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 17.09 | ||
| Fwd PE | 15.63 | ||
| P/S | |||
| P/FCF | |||
| P/OCF | |||
| P/B | |||
| P/tB | |||
| EV/EBITDA |
EPS(TTM)
EY
EPS(NY)
Fwd EY
FCF(TTM)
FCFY
OCF(TTM)
OCFY
SpS
BVpS
TBVpS
PEG (NY)N/A
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.44% | ||
| ROE | 16.33% | ||
| ROCE | |||
| ROIC | |||
| ROICexc | |||
| ROICexgc | |||
| OM | 26.86% | ||
| PM (TTM) | 5.61% | ||
| GM | 54.44% | ||
| FCFM |
ROA(3y)
ROA(5y)
ROE(3y)
ROE(5y)
ROIC(3y)
ROIC(5y)
ROICexc(3y)
ROICexc(5y)
ROICexgc(3y)
ROICexgc(5y)
ROCE(3y)
ROCE(5y)
ROICexcg growth 3Y
ROICexcg growth 5Y
ROICexc growth 3Y
ROICexc growth 5Y
OM growth 3Y
OM growth 5Y
PM growth 3Y
PM growth 5Y
GM growth 3Y
GM growth 5Y
F-Score
Asset Turnover0.43
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 4.91 | ||
| Debt/FCF | |||
| Debt/EBITDA | |||
| Cap/Depr | |||
| Cap/Sales | |||
| Interest Coverage | |||
| Cash Conversion | |||
| Profit Quality | |||
| Current Ratio | 2.88 | ||
| Quick Ratio | 2.61 | ||
| Altman-Z |
F-Score
WACC
ROIC/WACC
Cap/Depr(3y)
Cap/Depr(5y)
Cap/Sales(3y)
Cap/Sales(5y)
Profit Quality(3y)
Profit Quality(5y)
High Growth Momentum
Growth
EPS 1Y (TTM)-6.25%
EPS 3YN/A
EPS 5Y
EPS Q2Q%
EPS Next Y-12%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)38.15%
Revenue growth 3Y8.65%
Revenue growth 5Y
Sales Q2Q%
Revenue Next Year
Revenue Next 2Y
Revenue Next 3Y
Revenue Next 5Y
EBIT growth 1Y
EBIT growth 3Y
EBIT growth 5Y
EBIT Next Year
EBIT Next 3Y
EBIT Next 5Y
FCF growth 1Y
FCF growth 3Y
FCF growth 5Y
OCF growth 1Y
OCF growth 3Y
OCF growth 5Y