SOTERA HEALTH CO (SHC) Stock Fundamental Analysis
NASDAQ:SHC - Nasdaq - US83601L1026 - Common Stock - Currency: USD
SHC gets a fundamental rating of 5 out of 10. The analysis compared the fundamentals against 56 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 is not valued too expensively and it also shows a decent growth rate.
1. Profitability
1.1 Basic Checks
In the past year SHC was profitable.
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
The Return On Assets of SHC (1.00%) is better than 69.64% of its industry peers.
SHC has a Return On Equity of 7.51%. This is amongst the best in the industry. SHC outperforms 80.36% of its industry peers.
Looking at the Return On Invested Capital, with a value of 9.76%, SHC belongs to the top of the industry, outperforming 83.93% of the companies in the same industry.
Measured over the past 3 years, the Average Return On Invested Capital for SHC is significantly below the industry average of 13.15%.
The last Return On Invested Capital (9.76%) for SHC is above the 3 year average (8.04%), which is a sign of increasing profitability.
| 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 Profit Margin of 2.29%. This is in the better half of the industry: SHC outperforms 69.64% of its industry peers.
In the last couple of years the Profit Margin of SHC has declined.
Looking at the Operating Margin, with a value of 26.18%, SHC belongs to the top of the industry, outperforming 96.43% of the companies in the same industry.
In the last couple of years the Operating Margin of SHC has grown nicely.
The Gross Margin of SHC (54.45%) is better than 66.07% of its industry peers.
In the last couple of years the Gross Margin of SHC has grown nicely.
| 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
The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so SHC is destroying value.
The number of shares outstanding for SHC has been increased compared to 1 year ago.
The number of shares outstanding for SHC has been increased compared to 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 1.37, we must say that SHC is in the distress zone and has some risk of bankruptcy.
SHC has a worse Altman-Z score (1.37) than 60.71% of its industry peers.
The Debt to FCF ratio of SHC is 21.89, which is on the high side as it means it would take SHC, 21.89 years of fcf income to pay off all of its debts.
SHC's Debt to FCF ratio of 21.89 is in line compared to the rest of the industry. SHC outperforms 51.79% of its industry peers.
A Debt/Equity ratio of 5.55 is on the high side and indicates that SHC has dependencies on debt financing.
The Debt to Equity ratio of SHC (5.55) is worse than 91.07% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 5.55 | ||
| Debt/FCF | 21.89 | ||
| Altman-Z | 1.37 |
ROIC/WACC0.91
WACC10.73%
2.3 Liquidity
SHC has a Current Ratio of 2.46. This indicates that SHC is financially healthy and has no problem in meeting its short term obligations.
Looking at the Current ratio, with a value of 2.46, SHC is in line with its industry, outperforming 46.43% of the companies in the same industry.
A Quick Ratio of 2.19 indicates that SHC has no problem at all paying its short term obligations.
SHC has a Quick ratio (2.19) which is in line with its industry peers.
| 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 strongly by -12.35% in the last 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 has grown by 25.82% 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 7.17% yearly.
EPS 1Y (TTM)-12.35%
EPS 3Y-7.34%
EPS 5YN/A
EPS Q2Q%7.69%
Revenue 1Y (TTM)25.82%
Revenue growth 3Y5.71%
Revenue growth 5Y7.17%
Sales Q2Q%2.56%
3.2 Future
The Earnings Per Share is expected to grow by 12.75% on average over the next years. This is quite good.
Based on estimates for the next years, SHC will show a small growth in Revenue. The Revenue will grow by 6.85% on average per year.
EPS Next Y7.93%
EPS Next 2Y10.82%
EPS Next 3Y10.95%
EPS Next 5Y12.75%
Revenue Next Year3.69%
Revenue Next 2Y4.79%
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
SHC is valuated correctly with a Price/Earnings ratio of 15.82.
Based on the Price/Earnings ratio, SHC is valued cheaper than 87.50% of the companies in the same industry.
SHC is valuated rather cheaply when we compare the Price/Earnings ratio to 27.48, which is the current average of the S&P500 Index.
With a Price/Forward Earnings ratio of 13.06, SHC is valued correctly.
SHC's Price/Forward Earnings ratio is rather cheap when compared to the industry. SHC is cheaper than 91.07% of the companies in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 36.52, SHC is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 15.82 | ||
| Fwd PE | 13.06 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, SHC is valued cheaply inside the industry as 98.21% of the companies are valued more expensively.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of SHC indicates a somewhat cheap valuation: SHC is cheaper than 66.07% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 30.1 | ||
| EV/EBITDA | 10.03 |
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
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 |
11.23
0 (0%)
Chartmill FA Rating
GICS SectorHealth Care
GICS IndustryGroupPharmaceuticals, Biotechnology & Life Sciences
GICS IndustryLife Sciences Tools & Services
Earnings (Last)
Earnings (Next)
Inst Owners50.34%
Inst Owner Change0%
Ins Owners2.51%
Ins Owner Change15.67%
Market Cap3.19B
Analysts80
Price Target15.13 (34.73%)
Short Float %8.37%
Short Ratio10.14
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)-2.04%
PT rev (3m)-1.58%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-6.75%
EPS NY rev (1m)-0.2%
EPS NY rev (3m)1.2%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-2.08%
Revenue NY rev (1m)-0.09%
Revenue NY rev (3m)0.87%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 15.82 | ||
| Fwd PE | 13.06 | ||
| P/S | 2.35 | ||
| P/FCF | 30.1 | ||
| P/OCF | 11.81 | ||
| P/B | 7.7 | ||
| P/tB | N/A | ||
| EV/EBITDA | 10.03 |
EPS(TTM)0.71
EY6.32%
EPS(NY)0.86
Fwd EY7.65%
FCF(TTM)0.37
FCFY3.32%
OCF(TTM)0.95
OCFY8.47%
SpS4.77
BVpS1.46
TBVpS-3.4
PEG (NY)2
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 | 1.37 |
F-Score5
WACC10.73%
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)-12.35%
EPS 3Y-7.34%
EPS 5YN/A
EPS Q2Q%7.69%
EPS Next Y7.93%
EPS Next 2Y10.82%
EPS Next 3Y10.95%
EPS Next 5Y12.75%
Revenue 1Y (TTM)25.82%
Revenue growth 3Y5.71%
Revenue growth 5Y7.17%
Sales Q2Q%2.56%
Revenue Next Year3.69%
Revenue Next 2Y4.79%
Revenue Next 3Y5.32%
Revenue Next 5Y6.85%
EBIT growth 1Y19.62%
EBIT growth 3Y5.04%
EBIT growth 5Y9.46%
EBIT Next Year25.83%
EBIT Next 3Y12.69%
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%