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1. Company Snapshot

1.a. Company Description

STERIS plc provides infection prevention and other procedural products and services worldwide.It operates through four segments: Healthcare, Applied Sterilization Technologies, Life Sciences, and Dental.The Healthcare segment offers cleaning chemistries and sterility assurance products; automated endoscope reprocessing system and tracking products; accessories for gastrointestinal (GI) procedures, washers, sterilizers, and other pieces of capital equipment for the operation of a sterile processing department; and equipment used directly in the operating room, including surgical tables, lights, and connectivity solutions, as well as equipment management services.


It also provides capital equipment installation, maintenance, upgradation, repair, and troubleshooting services; preventive maintenance programs and repair services; instrument and endoscope repair and maintenance services; and custom process improvement consulting and outsourced instrument sterile processing services.The Applied Sterilization Technologies segment provides contract sterilization and testing services for medical device and pharmaceutical manufacturers through a network of approximately 50 contract sterilization and laboratory facilities.The Life Sciences segment designs, manufactures and sells consumable products, such as formulated cleaning chemistries, barrier and sterility assurance products, steam and vaporized hydrogen peroxide sterilizers, and washer disinfectors.


This segment also offers equipment installation, maintenance, upgradation, repair, and troubleshooting services; and preventive maintenance programs and repair services.The Dental segment provides hand and powered dental instruments, infection control products, personal protective equipment, and water quality products for dental suite.The company serves its products and services to hospitals, other healthcare providers, and pharmaceutical manufacturers.


The company was founded in 1985 and is based in Dublin, Ireland.

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1.b. Last Insights on STE

STERIS plc's recent performance was negatively impacted by a decline in gross margin, which contracted by 70 basis points to 43.9% in Q3 2026. Despite a 9% increase in total revenue and an 8% increase in constant currency organic revenue, investors focused on the margin contraction. Additionally, several institutional investors, including SG Americas Securities LLC, Principal Financial Group Inc., and Gateway Investment Advisers LLC, reduced their stakes in the company, which may have contributed to the negative sentiment.

1.c. Company Highlights

2. STERIS plc Delivers Solid Q3 2026 Results

STERIS plc reported its third-quarter 2026 financial results, with total as-reported revenue growing 9% and constant currency organic revenue growing 8%. The growth was driven by volume and 200 basis points of price, with gross margin declining 70 basis points to 43.9% due to increased tariffs and inflation. Adjusted net income from continuing operations was $249.4 million, and earnings per diluted share from continuing operations were $2.53, a 9% increase over the prior year, in line with analyst estimates. The company's ability to pass on price increases and maintain revenue growth is a testament to its strong market position.

Publication Date: Feb -06

📋 Highlights
  • Revenue Growth:: Total as-reported revenue grew 9% (9% organic growth), driven by 200 bps of price increases and volume gains.
  • Segment Performance:: AST segment saw 8% growth, with capital equipment revenue surging 103% and services rising 9%.
  • Margin Pressure:: Gross margin declined 70 bps to 43.9% due to tariffs and inflation, despite 9% adjusted net income growth ($249.4M) and 9% EPS increase ($2.53).
  • Tariff Mitigation:: STERIS is shifting product movement, negotiating suppliers, and improving productivity to offset tariff impacts, maintaining low leverage (just over 1x debt-to-EBITDA).
  • Future Outlook:: Fiscal 2026 guidance remains at 8-9% as-reported revenue growth and 7-8% organic growth, with fiscal 2027 growth targets (7-11%) likely stable despite Q4 unpredictability.

Segment Performance

The company’s healthcare segment saw constant currency organic revenue grow 8%, driven by growth across all categories, while AST segment grew 8% with 9% growth in services and 103% growth in capital equipment revenue. This strong segment performance is a positive indicator of the company's diversified revenue streams and its ability to drive growth across various business lines.

Guidance and Outlook

The company maintained its outlook for fiscal 2026, including 8% to 9% as-reported revenue growth and constant currency organic revenue growth of 7% to 8%. The company's guidance for fiscal '27 is expected to be provided in the next quarter, but Daniel A. Carestio stated that the macros don't look negative, and they don't see any material changes in the market, suggesting a continued growth trajectory. As Carestio mentioned, "the macros don't look negative, and we don't see any material changes in the market," indicating a stable outlook.

Valuation and Metrics

STERIS plc's current valuation metrics, including a P/E Ratio of 34.84, P/B Ratio of 3.42, and EV/EBITDA of 17.55, indicate a premium valuation. Analysts estimate next year's revenue growth at 6.1%, which may not be sufficient to justify the current valuation multiples. The company's ROIC of 7.74% and ROE of 10.21% are respectable, but the Net Debt / EBITDA ratio of 1.19 suggests a relatively conservative debt position.

Tariff Impact and Mitigation

The company is seeing a positive impact from US onshoring and capacity expansions in the life sciences segment, particularly in aseptic manufacturing. STERIS is also focused on mitigating the impact of tariffs, with efforts including shifting product movement, supplier negotiations, and productivity improvements, which should help maintain its profit margins.

3. NewsRoom

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STERIS plc (NYSE:STE) Receives Consensus Rating of “Moderate Buy” from Analysts

Feb -22

Source: defenseworld.net

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STERIS plc (NYSE:STE) Sees Large Growth in Short Interest

Feb -17

Source: defenseworld.net

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Contrasting QHSLab (OTCMKTS:USAQ) & STERIS (NYSE:STE)

Feb -10

Source: defenseworld.net

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Steris (STE) International Revenue Performance Explored

Feb -09

Source: zacks.com

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STERIS Q3 Earnings Call Highlights

Feb -07

Source: defenseworld.net

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STERIS: A Bump In The Road For A Reliable Name

Feb -06

Source: seekingalpha.com

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Steris PLC (STE) Q3 2026 Earnings Call Highlights: Strong Revenue Growth Amid Tariff Challenges

Feb -05

Source: gurufocus.com

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STERIS plc (STE) Q3 2026 Earnings Call Transcript

Feb -05

Source: seekingalpha.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (6.00%)

6. Segments

Healthcare

Expected Growth: 6.5%

As a fundamental segment, its growth is slightly above the global average due to the consistent demand for healthcare services and the potential for increased healthcare spending. This aligns with the global growth hypothesis, reflecting steady demand.

Applied Sterilization Technologies(AST)

Expected Growth: None%

None

Life Sciences

Expected Growth: 6.8%

The life sciences segment benefits from the growing demand for pharmaceuticals and biotech products. Its growth is slightly above the global average due to the increasing need for sterile and reliable manufacturing environments.

7. Detailed Products

Sterilization Systems

STERIS plc provides a range of sterilization systems, including steam sterilizers, ethylene oxide sterilizers, and hydrogen peroxide gas plasma sterilizers, designed to meet the specific needs of hospitals, pharmaceutical companies, and research institutions.

Infection Prevention Technologies

STERIS plc offers a range of infection prevention technologies, including UV light disinfection systems, automated room disinfection systems, and surface disinfection systems, designed to reduce the risk of healthcare-associated infections.

Endoscopy Reprocessing

STERIS plc provides a range of endoscopy reprocessing systems, including automated endoscope reprocessors and endoscope drying cabinets, designed to ensure the safe and effective reprocessing of endoscopes.

Pharmaceutical Processing Equipment

STERIS plc offers a range of pharmaceutical processing equipment, including bioreactors, fermentation systems, and purification systems, designed to support the development and manufacturing of pharmaceuticals and biologics.

Laboratory and Medical Equipment

STERIS plc provides a range of laboratory and medical equipment, including autoclaves, centrifuges, and microscopes, designed to support research, development, and patient care.

Service and Maintenance

STERIS plc offers a range of service and maintenance programs, including equipment maintenance, validation, and calibration, designed to ensure the optimal performance and compliance of equipment.

8. STERIS plc's Porter Forces

Forces Ranking

Threat Of Substitutes

STERIS plc operates in a niche market with high barriers to entry, reducing the threat of substitutes. However, the company's dependence on a few large customers increases the risk of substitution.

Bargaining Power Of Customers

STERIS plc's customers, primarily hospitals and healthcare facilities, have significant bargaining power due to their large purchasing volumes and ability to negotiate prices.

Bargaining Power Of Suppliers

STERIS plc's suppliers, primarily manufacturers of medical equipment and consumables, have limited bargaining power due to the company's large purchasing volumes and diversified supply chain.

Threat Of New Entrants

The threat of new entrants is low due to the high barriers to entry in the medical equipment and consumables market, including regulatory hurdles and significant capital requirements.

Intensity Of Rivalry

The medical equipment and consumables market is moderately competitive, with a few large players competing for market share. However, STERIS plc's strong brand reputation and diversified product portfolio help to mitigate the intensity of rivalry.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 33.07%
Debt Cost 3.95%
Equity Weight 66.93%
Equity Cost 7.95%
WACC 6.63%
Leverage 49.41%

11. Quality Control: STERIS plc passed 6 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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Drägerwerk

A-Score: 6.0/10

Value: 8.5

Growth: 3.3

Quality: 5.4

Yield: 3.8

Momentum: 9.5

Volatility: 5.3

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Sanofi

A-Score: 5.9/10

Value: 6.2

Growth: 4.0

Quality: 8.0

Yield: 7.5

Momentum: 2.5

Volatility: 7.3

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STERIS

A-Score: 5.3/10

Value: 1.9

Growth: 6.6

Quality: 7.1

Yield: 1.2

Momentum: 6.5

Volatility: 8.3

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Boston Scientific

A-Score: 5.2/10

Value: 1.2

Growth: 6.6

Quality: 6.8

Yield: 0.0

Momentum: 7.5

Volatility: 9.3

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Sonova

A-Score: 4.6/10

Value: 2.7

Growth: 4.6

Quality: 7.8

Yield: 3.1

Momentum: 1.0

Volatility: 8.3

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Philips

A-Score: 3.8/10

Value: 2.4

Growth: 1.7

Quality: 2.9

Yield: 6.9

Momentum: 3.0

Volatility: 5.7

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

250.65$

Current Price

250.65$

Potential

-0.00%

Expected Cash-Flows