SOTERA HEALTH CO (SHC) Stock Fundamental Analysis
NASDAQ:SHC - Nasdaq - US83601L1026 - Common Stock - Currency: USD
Taking everything into account, SHC scores 4 out of 10 in our fundamental rating. SHC was compared to 54 industry peers in the Life Sciences Tools & Services industry. While SHC has a great profitability rating, there are quite some concerns on its financial health. SHC has a correct valuation and a medium growth rate.
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
SHC has a Return On Assets of 1.00%. This is in the better half of the industry: SHC outperforms 66.67% of its industry peers.
With a decent Return On Equity value of 7.51%, SHC is doing good in the industry, outperforming 77.78% of the companies in the same industry.
SHC has a Return On Invested Capital of 9.76%. This is amongst the best in the industry. SHC outperforms 85.19% 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 15.97%.
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 better Profit Margin (2.29%) than 66.67% of its industry peers.
In the last couple of years the Profit Margin of SHC has declined.
With an excellent Operating Margin value of 26.18%, SHC belongs to the best of the industry, outperforming 94.44% of the companies in the same industry.
SHC's Operating Margin has improved in the last couple of years.
SHC has a Gross Margin of 54.45%. This is in the better half of the industry: SHC outperforms 66.67% of its industry peers.
SHC's Gross Margin has improved in the last couple of years.
| 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
SHC has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
SHC has more shares outstanding than it did 1 year ago.
SHC has more shares outstanding than it did 5 years ago.
Compared to 1 year ago, SHC has a worse debt to assets ratio.
2.2 Solvency
Based on the Altman-Z score of 1.55, we must say that SHC is in the distress zone and has some risk of bankruptcy.
The Altman-Z score of SHC (1.55) is comparable to the rest of the industry.
SHC has a debt to FCF ratio of 21.89. This is a negative value and a sign of low solvency as SHC would need 21.89 years to pay back of all of its debts.
Looking at the Debt to FCF ratio, with a value of 21.89, SHC is in line with its industry, outperforming 53.70% of the companies in the same industry.
SHC has a Debt/Equity ratio of 5.55. This is a high value indicating a heavy dependency on external financing.
SHC has a Debt to Equity ratio of 5.55. This is amonst the worse of the industry: SHC underperforms 92.59% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 5.55 | ||
| Debt/FCF | 21.89 | ||
| Altman-Z | 1.55 |
ROIC/WACC0.91
WACC10.76%
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 (2.46) which is comparable to the rest of the industry.
SHC has a Quick Ratio of 2.19. This indicates that SHC is financially healthy and has no problem in meeting its short term obligations.
The Quick ratio of SHC (2.19) is comparable to the rest of the 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 by -8.86% in the last year.
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.
Looking at the last year, SHC shows a small growth in Revenue. The Revenue has grown by 4.88% in the last year.
SHC shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 7.17% yearly.
EPS 1Y (TTM)-8.86%
EPS 3Y-7.34%
EPS 5YN/A
EPS Q2Q%5.26%
Revenue 1Y (TTM)4.88%
Revenue growth 3Y5.71%
Revenue growth 5Y7.17%
Sales Q2Q%23.8%
3.2 Future
Based on estimates for the next years, SHC will show a quite strong growth in Earnings Per Share. The EPS will grow by 12.75% on average per year.
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 Year3.78%
Revenue Next 2Y4.83%
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
The Price/Earnings ratio is 20.64, 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 85.19% of the companies listed in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 26.73, SHC is valued a bit cheaper.
The Price/Forward Earnings ratio is 17.29, which indicates a rather expensive current valuation of SHC.
SHC's Price/Forward Earnings ratio is rather cheap when compared to the industry. SHC is cheaper than 85.19% of the companies in the same industry.
SHC is valuated cheaply when we compare the Price/Forward Earnings ratio to 34.61, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 20.64 | ||
| Fwd PE | 17.29 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, SHC is valued cheaply inside the industry as 96.30% of the companies are valued more expensively.
Based on the Price/Free Cash Flow ratio, SHC is valued a bit cheaper than 61.11% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 39.84 | ||
| EV/EBITDA | 11.58 |
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)2.6
PEG (5Y)N/A
EPS Next 2Y10.82%
EPS Next 3Y10.95%
5. Dividend
5.1 Amount
SHC does not give a dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
14.86
+0.8 (+5.69%)
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 Change-0.31%
Ins Owners2.51%
Ins Owner Change15.67%
Market Cap4.22B
Analysts81.67
Price Target15.21 (2.36%)
Short Float %9.31%
Short Ratio11.62
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)0.54%
PT rev (3m)-1.52%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-0.51%
EPS NY rev (1m)0%
EPS NY rev (3m)0.86%
Revenue NQ rev (1m)0.03%
Revenue NQ rev (3m)-0.08%
Revenue NY rev (1m)0.09%
Revenue NY rev (3m)0%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 20.64 | ||
| Fwd PE | 17.29 | ||
| P/S | 3.11 | ||
| P/FCF | 39.84 | ||
| P/OCF | 15.62 | ||
| P/B | 10.19 | ||
| P/tB | N/A | ||
| EV/EBITDA | 11.58 |
EPS(TTM)0.72
EY4.85%
EPS(NY)0.86
Fwd EY5.79%
FCF(TTM)0.37
FCFY2.51%
OCF(TTM)0.95
OCFY6.4%
SpS4.77
BVpS1.46
TBVpS-3.4
PEG (NY)2.6
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 | 1.55 |
F-Score5
WACC10.76%
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)-8.86%
EPS 3Y-7.34%
EPS 5YN/A
EPS Q2Q%5.26%
EPS Next Y7.93%
EPS Next 2Y10.82%
EPS Next 3Y10.95%
EPS Next 5Y12.75%
Revenue 1Y (TTM)4.88%
Revenue growth 3Y5.71%
Revenue growth 5Y7.17%
Sales Q2Q%23.8%
Revenue Next Year3.78%
Revenue Next 2Y4.83%
Revenue Next 3Y5.32%
Revenue Next 5Y6.85%
EBIT growth 1Y19.62%
EBIT growth 3Y5.04%
EBIT growth 5Y9.46%
EBIT Next Year25.74%
EBIT Next 3Y12.6%
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%