STERIS plc
STERIS plc Fundamental Analysis
STERIS plc (STE) shows moderate financial fundamentals with a PE ratio of 34.67, profit margin of 12.14%, and ROE of 10.21%. The company generates $5.8B in annual revenue with moderate year-over-year growth of 6.24%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 66.7/100 based on profitability, valuation, growth, and balance sheet metrics. The C+ grade reflects average fundamentals, with notable risks in certain areas.
Fundamental Health Score
We analyze STE's fundamental strength across five key dimensions:
Efficiency Score
WeakSTE struggles to generate sufficient returns from assets.
Valuation Score
WeakSTE trades at a premium to fair value.
Growth Score
ExcellentSTE delivers strong and consistent growth momentum.
Financial Health Score
ExcellentSTE maintains a strong and stable balance sheet.
Profitability Score
WeakSTE struggles to sustain strong margins.
Key Financial Metrics
Is STE Expensive or Cheap?
P/E Ratio
STE trades at 34.67 times earnings. This suggests a premium valuation.
PEG Ratio
When adjusting for growth, STE's PEG of 12.12 indicates potential overvaluation.
Price to Book
The market values STERIS plc at 3.42 times its book value. This suggests the stock is fully valued or overvalued on an asset basis.
EV/EBITDA
Enterprise value stands at 16.78 times EBITDA. This signals the market has high growth expectations.
How Well Does STE Make Money?
Net Profit Margin
For every $100 in sales, STERIS plc keeps $12.14 as profit after all expenses.
Operating Margin
Core operations generate 17.18 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $10.21 in profit for every $100 of shareholder equity.
ROA
STERIS plc generates $6.68 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
STERIS plc produces operating cash flow of $1.26B, showing steady but balanced cash generation.
Free Cash Flow
STERIS plc generates strong free cash flow of $915.67M, providing ample flexibility for dividends, buybacks, or growth.
FCF Per Share
Each share generates $9.33 in free cash annually.
FCF Yield
STE converts 3.74% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
34.67
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
12.12
vs 25 benchmark
P/B Ratio
Price to book value ratio
3.42
vs 25 benchmark
P/S Ratio
Price to sales ratio
4.20
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
0.29
vs 25 benchmark
Current Ratio
Current assets to current liabilities
2.48
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.10
vs 25 benchmark
ROA
Return on assets percentage
0.07
vs 25 benchmark
ROCE
Return on capital employed
0.10
vs 25 benchmark
How STE Stacks Against Its Sector Peers
| Metric | STE Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 34.67 | 29.43 | Worse (Expensive) |
| ROE | 10.21% | 800.00% | Weak |
| Net Margin | 12.14% | -20145.00% (disorted) | Strong |
| Debt/Equity | 0.29 | 0.30 | Neutral |
| Current Ratio | 2.48 | 4.64 | Strong Liquidity |
| ROA | 6.68% | -17936.00% (disorted) | Weak |
STE outperforms its industry in 2 out of 6 key metrics, particularly excelling in Net Margin, but lagging in P/E Ratio.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews STERIS plc's 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
54.92%
Industry Style: Defensive, Growth, Innovation
High GrowthEPS CAGR
29.67%
Industry Style: Defensive, Growth, Innovation
High GrowthFCF CAGR
67.20%
Industry Style: Defensive, Growth, Innovation
High Growth