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1. Company Snapshot

1.a. Company Description

Sotera Health Company provides sterilization, and lab testing and advisory services in the United States, Canada, Europe, and internationally.The company's sterilization services include gamma and electron beam irradiation, and EO processing; Nelson Labs comprise microbiological and analytical chemistry testing; and advisory services for medical device and biopharmaceutical industries.It serves medical devices; pharmaceuticals; food and agricultural products; and commercial, advanced, and specialty application industries.


The company was formerly known as Sotera Health Topco, Inc.and changed its name to Sotera Health Company in October 2020.Sotera Health Company was incorporated in 2017 and is headquartered in Broadview Heights, Ohio.

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1.b. Last Insights on SHC

Sotera Health's recent performance was negatively impacted by decreased holdings from major investors, including Campbell & CO Investment Adviser LLC, which sold 34.7% of its shares. However, the company's Q4 2025 earnings beat estimates, with quarterly earnings of $0.26 per share. Additionally, Sotera Health received a "Moderate Buy" consensus rating from analysts, with eight firms giving a buy rating. A recent rating upgrade to Buy by Zacks Rank #2 reflects growing optimism about its earnings prospects. Institutional investors, such as Capricorn Fund Managers Ltd and Sessa Capital, have also shown interest, with increased holdings.

1.c. Company Highlights

2. Sotera Health's 2025 Earnings: A Strong Year of Performance

Sotera Health reported a robust financial performance for 2025, with total company revenue increasing 5.7% to $1.164 billion. Adjusted EBITDA grew 8.2% to $593.8 million, resulting in margin expansion to 51%, an improvement of 118 basis points. The company's adjusted free cash flow was over $200 million in 2025. Earnings per share (EPS) came in at $0.1217, missing analyst estimates of $0.24. For the fourth quarter, total company revenues increased 4.6% to $303 million, with adjusted EBITDA margins at 51.8%.

Publication Date: Feb -25

📋 Highlights
  • 20-Year Revenue Growth:: 2025 revenue rose 5.7% to $1.164 billion, with adjusted EBITDA up 8.2% to $593.8 million (51% margin, +118 bps).<br>
  • Strong Free Cash Flow:: Adjusted free cash flow exceeded $200 million in 2025, driven by operational efficiency and margin expansion.<br>
  • Segment Growth:: XBU customer revenue surged 9% YoY, Sterigenics delivered 8% constant currency growth, and Nordion achieved 9% growth.<br>
  • 2026 Guidance:: Revenue projected to reach $1.233–$1.251 billion (5–6.5% growth), adjusted EBITDA of $632–$641 million (5.5–7% growth).<br>
  • Strategic Investments:: X-ray facility set to open in 2026, with $135–$145 million interest expense expected and $0.93–$1.01 adjusted EPS guidance.<br>

Segment Performance

The Sterigenics segment delivered approximately 8% constant currency revenue growth, driven by improved volume and mix. Nordion achieved around 9% constant currency revenue growth, while the XBU customer base expanded 9% year-over-year. The company's commercial initiatives continue to build momentum, with a strong value proposition across Sotera Health.

Guidance and Outlook

For 2026, Sotera Health expects total company revenue to grow between 5% to 6.5% on a constant currency basis, with adjusted EBITDA improving to a range of $632 million to $641 million. The company anticipates mid- to high single-digit constant currency revenue growth for Sterigenics and low to mid-single digit growth for Nordion. The X-ray facility is expected to open in the second half of 2026, bringing a new modality to the market.

Valuation and Metrics

With a P/E Ratio of 60.91 and an EV/EBITDA of 17.0, Sotera Health's valuation appears to be pricing in significant growth expectations. Analysts estimate next year's revenue growth at 5.9%, which is within the company's guidance range. The company's ROIC is 6.83%, and ROE is 14.98%, indicating a relatively healthy return profile. The Net Debt / EBITDA ratio is 4.91, suggesting a significant debt burden. The Free Cash Flow Yield is 2.0%, which is relatively modest.

Management Insights

As Michael Petras noted, "We should improve from here, and this should be the last quarter where we faced that kind of headwind." The company is focused on organic investments and debt reduction, with a commitment to a free cash flow target for the 2025 to 2027 period. Sotera Health is well-positioned in the competitive landscape, with a strong business model and global platform.

3. NewsRoom

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All You Need to Know About Sotera Health (SHC) Rating Upgrade to Buy

Apr -07

Source: zacks.com

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Capricorn Fund Managers Ltd Purchases New Shares in Sotera Health Company $SHC

Apr -06

Source: defenseworld.net

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Sotera Health Company (NASDAQ:SHC) Receives Average Recommendation of “Moderate Buy” from Analysts

Apr -03

Source: defenseworld.net

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Sotera Health (SHC) Soars 8.2%: Is Further Upside Left in the Stock?

Apr -01

Source: zacks.com

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A $175 Million Move Into Sotera Health Signals Potential Opportunity Amid 21% Stock Drop

Mar -23

Source: fool.com

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Sotera Health Shares Down 24% This Year. Is the Stock a Buy as One Investor Reveals Adding $3 Million More?

Mar -20

Source: fool.com

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Sotera Health Company (SHC) Presents at 2026 KeyBanc Capital Markets Healthcare Forum Transcript

Mar -18

Source: seekingalpha.com

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Sotera Health Appoints Kenneth D. Krause to the Board of Directors

Mar -16

Source: globenewswire.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (5.54%)

6. Segments

Sterigenics

Expected Growth: 4.8%

Growing demand for sterilization services in the medical device and pharmaceutical industries, driven by increasing regulatory requirements, advancements in medical technology, and an aging population, will fuel Sterigenics' growth.

Nelson Labs

Expected Growth: 7.8%

Growing demand for outsourcing of testing services, increasing regulatory requirements, and rising adoption of medical devices and pharmaceuticals drive growth in the microbiological and analytical testing services market.

Nordion

Expected Growth: 5.5%

Growing demand for sterilization services in the medical device and pharmaceutical industries, driven by increasing regulatory requirements and advancements in medical technology, will fuel Nordion's growth.

7. Detailed Products

Sterilization Services

Sotera Health Company provides sterilization services to ensure the highest level of product safety and quality. This includes gamma radiation, electron beam, and X-ray sterilization methods.

Lab Testing and Validation

Sotera Health Company offers laboratory testing and validation services to ensure the safety and efficacy of medical devices, pharmaceuticals, and biotechnology products.

Nelson Labs

Nelson Labs is a leading provider of microbiological testing and consulting services, offering a range of testing and validation services to the medical device, pharmaceutical, and biotechnology industries.

Sterigenics

Sterigenics is a leading provider of sterilization services, offering gamma radiation, electron beam, and X-ray sterilization methods to the medical device, pharmaceutical, and biotechnology industries.

Nordion

Nordion is a leading provider of gamma sterilization services, offering a range of sterilization methods to the medical device, pharmaceutical, and biotechnology industries.

8. Sotera Health Company's Porter Forces

Forces Ranking

Threat Of Substitutes

Sotera Health Company operates in a highly regulated industry, and the threat of substitutes is moderate. While there are some alternative sterilization methods, they are not widely adopted, and Sotera's services remain in high demand.

Bargaining Power Of Customers

Sotera Health Company's customers are largely dependent on the company's services, and the bargaining power of customers is low. The company's strong relationships with its customers and its reputation for quality and reliability also contribute to its low bargaining power.

Bargaining Power Of Suppliers

Sotera Health Company relies on a few key suppliers for its sterilization equipment and materials. While the company has some bargaining power due to its large scale of operations, the suppliers also have some bargaining power due to the specialized nature of their products.

Threat Of New Entrants

The threat of new entrants in the sterilization services industry is low due to the high barriers to entry, including the need for specialized equipment and expertise, as well as the regulatory hurdles that must be overcome.

Intensity Of Rivalry

The sterilization services industry is highly competitive, with several large players competing for market share. Sotera Health Company faces intense competition from its rivals, which puts pressure on its pricing and profitability.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 83.49%
Debt Cost 14.36%
Equity Weight 16.51%
Equity Cost 14.36%
WACC 14.36%
Leverage 505.52%

11. Quality Control: Sotera Health Company passed 3 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

Stock-Card
Guardant Health

A-Score: 5.2/10

Value: 8.0

Growth: 4.7

Quality: 6.4

Yield: 0.0

Momentum: 10.0

Volatility: 2.3

1-Year Total Return ->

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Stock-Card
Exact Sciences

A-Score: 4.4/10

Value: 4.4

Growth: 6.0

Quality: 3.5

Yield: 0.0

Momentum: 9.0

Volatility: 3.3

1-Year Total Return ->

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Stock-Card
Sotera Health

A-Score: 3.9/10

Value: 1.1

Growth: 5.2

Quality: 4.6

Yield: 0.0

Momentum: 8.0

Volatility: 4.7

1-Year Total Return ->

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Stock-Card
Revvity

A-Score: 3.5/10

Value: 2.9

Growth: 3.1

Quality: 5.6

Yield: 0.0

Momentum: 3.0

Volatility: 6.3

1-Year Total Return ->

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Stock-Card
Illumina

A-Score: 3.4/10

Value: 2.6

Growth: 2.8

Quality: 7.2

Yield: 0.0

Momentum: 4.0

Volatility: 3.7

1-Year Total Return ->

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Stock-Card
Neogen

A-Score: 2.9/10

Value: 9.0

Growth: 1.3

Quality: 3.2

Yield: 0.0

Momentum: 1.0

Volatility: 2.7

1-Year Total Return ->

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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

16.03$

Current Price

16.03$

Potential

-0.00%

Expected Cash-Flows