Table of Contents :
• Stock Rating & Target Price
• Investment Thesis
• Fundamental Models Used
• Company Description
• Corporate Timeline
• Key Metrics (KPI ) and Recently Reported Earnings Review
• Business Highlights, Strategic Announcements & Outlook
• Quarter-over-Quarter (Q-o-Q) and Year-over-Year (Y-o-Y) Growth Analysis
• Key Catalysts Driving Growth
• Historical Financial Statement Analysis & CAGR Trends
• Quarterly Key Financial Ratios and Performance Metrics
• Annual Financial Performance Analysis: Horizontal and Vertical Financial Analysis, Trends
• Financial Forecasts
• Annual Forecasts: Income Statement
• Annual Forecasts: Cash Flow Statements
• Net Debt Levels
• A Closer Look at DCF: Our Assumptions and Methodology
• Terminal Value Calculation
• Target Price Analysis
• Valuation Multiples
• Supplementary Valuation Analysis: Multiples Approach
• Scenario/Sensitivity Analysis – Base Case , Bull Case ,Bear Case
• Holistic Peer Review & Trading Comps: Financial Data, Operational Metrics, and Valuation Multiples
• Implied Price Per Share
• Ownership Activity/ Insider Trades
• Ownership Summary
• An analysis of ESG Risk Rating
• Key Professionals
• Key Board Members
• Key Risks Considerations
• Analyst Ratings
• Analyst Industry Views
• Disclosures
STERIS plc: Recurring Revenue Strength Drives Resilience – Will It Offset Margin Pressures?
STERIS delivered solid fiscal Q2 2025 results, with revenue up 7% YoY to $1.3B, driven by 240 bps of price increases and robust recurring revenue, particularly in Healthcare (+9%). While Life Sciences organic revenue grew 3%, a 4% overall decline reflected the CECS divestiture, though margins improved due to a favorable consumables mix. Applied Sterilization Technologies (AST) posted 9% organic growth, but margin contraction (-430 bps YoY) due to labor and energy inflation and a one-time loss in Mevex weighed on profitability. Management remains optimistic about a rebound in AST margins, supported by bioprocessing demand in H2 FY25. Free cash flow of $344.5M and a 1.5x gross leverage ratio reflect financial strength, enabling strategic M&A and shareholder returns. Tailwinds include a $405M Healthcare backlog, procedural recovery, and durable demand for Life Sciences consumables. However, labor and energy costs, Healthcare shipment delays, and a pending lawsuit tied to ethylene oxide sterilization pose headwinds. Strategic reshoring initiatives mitigate China tariff risks, while AST margin recovery and stronger bioprocessing demand are key growth drivers. With STERIS navigating near-term pressures, can its recurring revenue strength and operational agility sustain long-term value creation amidst evolving regulatory and geopolitical risks?
