Company Reports

Steris reported 6% constant-currency organic revenue growth and 11% adjusted EPS growth for the first quarter of fiscal 2027. Management announced a $600 million investment in a new facility in North Carolina and raised expected capital expenditure in 2027 to $450 million (from $375 million).

Steris is a leading provider of sterilization products and services to healthcare organizations, biopharma producers, and device manufacturers. The company also has a strong presence across operating rooms and endoscopy centers. Over the past few years, Steris has closed several acquisitions to enhance its healthcare offerings. With more procedures shifting to an outpatient setting, we think Steris’ expanded product portfolio positions itself as a “one-stop shop” that supplies mission-critical sterilization equipment and services. The burgeoning ambulatory surgery centers and physicians’ offices should benefit the most when sourcing from Steris, as they don’t necessarily have the capacity to deal with multiple vendors.

Steris is a leading provider of sterilization products and services to healthcare organizations, biopharma producers, and device manufacturers. The company also has a strong presence across operating rooms and endoscopy centers. Over the past few years, Steris has closed several acquisitions to enhance its healthcare offerings. With more procedures shifting to an outpatient setting, we think Steris’ expanded product portfolio positions itself as a “one-stop shop” that supplies mission-critical sterilization equipment and services. The burgeoning ambulatory surgery centers and physicians’ offices should benefit the most when sourcing from Steris, as they don’t necessarily have the capacity to deal with multiple vendors.

Steris delivered 5% constant-currency organic revenue growth in its fiscal fourth quarter, and the firm provided guidance for fiscal 2027 that featured revenue growth and adjusted EPS midpoints of 7.5% and $11.20, respectively. Both marks were slightly ahead of FactSet's consensus expectations.

Steris is a leading provider of sterilization products and services to healthcare organizations, biopharma producers, and device manufacturers. The company also has a strong presence across operating rooms and endoscopy centers. Over the past few years, Steris has closed several acquisitions to enhance its healthcare offerings. With more procedures shifting to an outpatient setting, we think Steris’ expanded product portfolio positions itself as a “one-stop shop” that supplies mission-critical sterilization equipment and services. The burgeoning ambulatory surgery centers and physicians’ offices should benefit the most when sourcing from Steris, as they don’t necessarily have the capacity to deal with multiple vendors.

Steris increased both reported revenue and adjusted diluted earnings per share by 9% during the fiscal third quarter of 2026. However, management reaffirmed full-year guidance and raised tariff expectations, sending the stock price down about 10% following the earnings call.

In Steris' fiscal 2026 second quarter, reported revenue grew 10%, with 100 basis points of favorable currency impact. Adjusted diluted earnings per share grew 15%. Following the better-than-expected results, management lifted full-year top- and bottom-line guidance by 1% and 2%, respectively.

Steris reported revenue growth of 9% for its first quarter of fiscal 2026, or 8% of constant currency organic growth. Management also updated annual revenue guidance to 8%-9% growth, from 6%-7%, which is mostly due to a more favorable currency outlook. Guidance for adjusted EPS was unchanged.

Steris is a leading provider of sterilization products and services to healthcare organizations, biopharma producers, and device manufacturers. The company also has a strong presence across operating rooms and endoscopy centers. Over the past few years, Steris has closed several acquisitions to enhance its healthcare offerings. With more procedures shifting to an outpatient setting, we think Steris’ expanded product portfolio positions itself as a “one-stop shop” that supplies mission-critical sterilization equipment and services. The burgeoning ambulatory surgery centers and physicians’ offices should benefit the most when sourcing from Steris, as they don’t necessarily have the capacity to deal with multiple vendors.

Narrow-moat Steris issued fourth-quarter results and fiscal 2026 guidance that modestly beat our expectations. Constant-currency organic revenue growth was 6% year over year and gross profit margins increased 170 basis points over the prior year, driven by positive contributions from pricing, product mix, and productivity gains. The company provided fiscal 2026 guidance of 6%-7% revenue growth for each segment and 7%-10% growth in earnings. This guidance includes an estimated impact of $30 million from current tariffs, or 55 basis points of fiscal 2025's revenue, which is milder than our expectation. We maintain our fair value estimate of $231 and think the shares are starting to climb into overvalued territory after strong year-to-date price performance.

Narrow-moat Steris reported fiscal 2025 third-quarter results that were in line with our expectations. Revenue for the quarter increased to $1.4 billion, or 6% year-over-year organic growth in constant currency. The company refreshed its fiscal 2025 constant-currency organic growth target to 6%, which is at the bottom of the previous range of 6%-7% and is negatively affected by timing delays in healthcare capital equipment. We maintain our $231 fair value estimate and view shares as fairly valued.

Narrow-moat Steris reported fiscal 2025 second-quarter results in line with our expectations. Total revenue from continuing operations increased 7% year on year to $1.3 billion. Most of this was driven by volume growth, but 240 basis points was attributable to price increases. The company is on track to reach its reiterated fiscal 2025 revenue growth goal of 6.5%-7.5%. However, it also disclosed an ongoing lawsuit against its former ethylene oxide sterilization facility in Illinois. As the largest contract sterilization provider, Steris has held a clean safety record with regard to its EO operations. We maintain our $231 fair value estimate as we believe the potential negative impacts from the lawsuit will only be short-term. We think EO will remain the mainstream technology to sterilize medical equipment; half of all medical equipment sold in the US is sterilized using EO, and a rapid shift to alternative technologies could lead to severe supply shortages.

Narrow-moat Steris’ first-quarter results were in line with our expectations. Quarterly revenue was $1.3 billion, translating to 6% year-over-year growth in constant currency. The company reiterated its fiscal 2025 revenue guidance of $5.47 billion-$5.52 billion, or 6%-7% growth on a constant-currency basis. We are maintaining our $231 fair value estimate and view Steris’ current market price as about fairly valued.

Steris is a leading provider of sterilization products and services to healthcare organizations, biopharma producers, and device manufacturers. The company also has a strong presence across operating rooms and endoscopy centers. Over the past few years, Steris has closed several acquisitions to enhance its healthcare offerings. With more procedures shifting to an outpatient setting, we think Steris’ expanded product portfolio positions itself as a “one-stop shop” that supplies mission-critical sterilization equipment and services. The burgeoning ambulatory surgery centers and physicians’ offices should benefit the most when sourcing from Steris, as they don’t necessarily have the capacity to deal with multiple vendors.

We are refreshing our views on Steris and reaffirming our narrow moat rating with a $231 fair value estimate. The company's narrow moat comes from strong switching costs for its end users, namely healthcare providers, biopharma companies, and device manufacturers. We think that future product line expansions, as well as increased contract sterilization capacities, should support our mid- to high-single-digit revenue growth forecast over the next five years.

We are dropping coverage of Steris. We provide broad coverage of more than 1,500 companies globally and periodically adjust our coverage according to investor interest and staffing.

While narrow-moat Steris' results did not quite meet our expectations in the fiscal first quarter and also fell short of FactSet-aggregated consensus, this was not enough to move the needle on our $201 fair value estimate. The shares now look fairly valued.

Steris, domiciled in Ireland and headquartered in Mentor, Ohio, is a dominant force in medical device sterilization, sterilizing one third of all medical devices in the world. Because it offers a full suite of sterilization solutions, from the sale of individual sterilizers to full outsourcing, Steris benefits regardless of how hospitals choose to manage sterilization. Steris also has a strong presence in the operating room, with a near 50% share of U.S. operating room capital equipment, including surgical tables and lights.

Narrow-moat Steris ended the fiscal year on a high note with top-line outperformance, and while reported margin was lower on a year-over-year basis, this was mainly due to costs from the Cantel integration, and margin expanded on an adjusted basis. After rolling our model, we are increasing our fair value estimate to $201 per share from $189, and see shares as fairly valued.

Narrow-moat Steris had a good fiscal third quarter, moderately exceeding both our expectations and consensus aggregated by FactSet. While operating costs were a bit higher than anticipated--due to inflation and acquisition costs--sales growth was strong, and there is no change to our $189 fair value estimate. We attribute the market’s positive reaction to the outperformance and raised outlook, though the quarter’s results don’t have a material impact on the firm’s long-term trajectory in our view, and shares remain overvalued.