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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 Company's recent performance was driven by strong Q3 2025 earnings, with net revenues increasing 9.1% to $311 million and Adjusted EBITDA rising 12.2% to $164 million. The company's quarterly earnings of $0.26 per share beat estimates, driven by growth in its sterilization solutions, lab testing, and advisory services. Management raised the 2025 Adjusted EBITDA growth range to 6.75% - 7.75% and reaffirmed its net revenues outlook. A secondary offering of common stock by affiliates of Warburg Pincus and GTCR also took place, with no impact on the company's operations.

1.c. Company Highlights

2. Sotera Health's Q3 2025 Earnings: A Strong Performance

Sotera Health reported a robust third quarter, with total company revenues increasing 9.1% to $311 million, driven by growth across its Sterigenics and Nordion segments. Adjusted EBITDA margins expanded 147 basis points to 52.7%, resulting in adjusted EBITDA growth of 12.2% to $164 million. The company's actual EPS came in at $0.26, beating estimates of $0.22.

Publication Date: Nov -09

📋 Highlights
  • Total Company Growth:: Revenues rose 9.1% to $311M, adjusted EBITDA up 12.2% to $164M, with margins expanding 147 bps to 52.7%.
  • Sterigenics Performance:: 9.8% revenue growth driven by volume mix and pricing, segment income up 11.6% with margins rising 90 bps to 55.6%.
  • Nordion Surge:: Revenue jumped 22.4% to $63M, segment income grew 19.9%, but margins fell 130 bps to 60.6% due to mix shifts.
  • Nelson Labs Resilience:: Revenue declined 5% to $56M, yet segment income rose 1.9% and margins expanded 229 bps to 34.1%.
  • Financial Strength:: Net leverage ratio improved to 3.3x, $184M operating cash flow, $890M liquidity, and raised 2025 EBITDA growth outlook to 6.75–7.75%.

Segment Performance

Sterigenics delivered 9.8% top-line growth, driven by favorable volume mix, increased pricing, and foreign currency exchange benefits. Nordion's revenue increased 22.4% to $63 million, driven by volume and mix benefits, favorable pricing, and customer pricing. Nelson Labs reported a 5% decline in revenue, but segment income rose 1.9%, with margins expanding 229 basis points year-over-year to 34.1%. As Michael Petras noted, "the company is seeing consistent performance across Sterigenics and multiple categories, bioprocessing, MedTech broadly, and expects that to continue going forward."

Cash Flow and Liquidity

The company generated $184 million in positive operating cash flow, with capital expenditures totaling $87 million. Sotera Health had $890 million in available liquidity, and its net leverage ratio improved to 3.3x at quarter end, down from 4.2x as of Q3 2023.

Outlook and Guidance

The company is maintaining its full-year constant currency revenue growth outlook range of 4.5% to 6% and raising its constant currency adjusted EBITDA growth outlook to 6.75% to 7.75%. Sotera Health expects adjusted EPS to be in the range of $0.81 to $0.86.

Valuation

With a P/E Ratio of 80.36 and an EV/EBITDA multiple of 16.07, Sotera Health's valuation appears to be pricing in significant growth expectations. Analysts estimate next year's revenue growth at 5.8%, which may not be sufficient to justify the current valuation. The company's ROE of 11.79% and ROIC of 5.27% indicate a relatively efficient use of capital.

3. NewsRoom

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Sotera Health Announces Secondary Offering of Common Stock

Nov -06

Source: globenewswire.com

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Sotera Health Company (SHC) Q3 2025 Earnings Call Transcript

Nov -04

Source: seekingalpha.com

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Here's What Key Metrics Tell Us About Sotera Health (SHC) Q3 Earnings

Nov -04

Source: zacks.com

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Sotera Health Company (SHC) Q3 Earnings and Revenues Surpass Estimates

Nov -04

Source: zacks.com

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Sotera Health Reports Strong Third-Quarter and Year-to-Date 2025 Results

Nov -04

Source: globenewswire.com

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Ethic Inc. Has $130,000 Stake in Sotera Health Company $SHC

Nov -01

Source: defenseworld.net

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Yousif Capital Management LLC Sells 1,076 Shares of Sotera Health Company $SHC

Oct -23

Source: defenseworld.net

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Sotera Health Announces Third-Quarter 2025 Earnings Release Date

Oct -21

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: 6.2

Yield: 0.0

Momentum: 10.0

Volatility: 2.0

1-Year Total Return ->

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Exact Sciences

A-Score: 3.4/10

Value: 4.8

Growth: 6.0

Quality: 3.2

Yield: 0.0

Momentum: 2.0

Volatility: 4.7

1-Year Total Return ->

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Illumina

A-Score: 3.3/10

Value: 4.6

Growth: 2.8

Quality: 7.4

Yield: 0.0

Momentum: 1.5

Volatility: 3.7

1-Year Total Return ->

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Stock-Card
Sotera Health

A-Score: 3.3/10

Value: 1.4

Growth: 5.2

Quality: 3.8

Yield: 0.0

Momentum: 6.0

Volatility: 3.3

1-Year Total Return ->

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Stock-Card
Revvity

A-Score: 3.3/10

Value: 3.0

Growth: 3.1

Quality: 5.7

Yield: 0.0

Momentum: 1.5

Volatility: 6.3

1-Year Total Return ->

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Stock-Card
Neogen

A-Score: 2.5/10

Value: 7.9

Growth: 1.3

Quality: 3.2

Yield: 0.0

Momentum: 0.5

Volatility: 2.3

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

16.75$

Current Price

16.75$

Potential

-0.00%

Expected Cash-Flows