Sotera Health Co (NASDAQ: SHC)

Sector: Healthcare Industry: Diagnostics & Research CIK: 0001822479
P/B 8.47
P/E 84.15
P/S 4.05
Market Cap 4.66 Bn
ROIC (Qtr) 8.02
Div Yield % 0.00
Rev 1y % (Qtr) 9.05
Total Debt (Qtr) 2.28 Bn
Debt/Equity (Qtr) 4.14

About

Stock Price Chart

Analysis

Pros

  • Healthy cash reserves of 301.03M provide 13.15x coverage of short-term debt 22.90M, demonstrating strong liquidity position and minimal refinancing risk.
  • Tangible assets of 1.80B provide exceptional 57.96x coverage of deferred revenue 30.99M, showing strong service capability backing.
  • Operating cash flow of 239.81M provides strong 7.74x coverage of deferred revenue 30.99M, indicating service delivery capability.
  • Operating cash flow of 239.81M fully covers other non-current liabilities 107.82M by 2.22x, showing strong long-term stability.
  • Operating cash flow of 239.81M provides solid 0.99x coverage of current liabilities 242.40M, showing strong operational health.

Cons

  • Operating cash flow of 239.81M barely covers its investment activities of (150.31M), with a coverage ratio of -1.60, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • High receivables of 142.39M relative to inventory of 49.87M (2.86 ratio) suggests aggressive credit terms or collection difficulties, potentially masking revenue quality issues.
  • Operating earnings of 283.61M show weak coverage of depreciation charges of 144.49M, with a 1.96 ratio indicating high capital intensity and potential reinvestment needs.
  • High depreciation of 144.49M relative to operating cash flow of 239.81M, which is 0.60x suggests significant maintenance capital requirements affecting free cash flow.
  • Free cash flow of 86.62M represents just -0.96x of debt issuance (90.26M), suggesting concerning reliance on leverage rather than internal cash generation for growth.

Peer Comparison

Companies in the Diagnostics & Research
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 TMO Thermo Fisher Scientific Inc. 216.83 Bn 33.00 4.96 35.68 Bn
2 DHR Danaher Corp /De/ 162.47 Bn 46.38 6.69 16.86 Bn
3 IDXX Idexx Laboratories Inc /De 56.88 Bn 55.36 13.65 1.09 Bn
4 A Agilent Technologies, Inc. 39.82 Bn 32.64 5.87 3.41 Bn
5 IQV Iqvia Holdings Inc. 38.85 Bn 30.28 2.44 15.19 Bn
6 NTRA Natera, Inc. 31.32 Bn -101.29 14.80 0.18 Bn
7 MTD Mettler Toledo International Inc/ 28.99 Bn 34.68 7.35 2.21 Bn
8 WAT Waters Corp /De/ 22.92 Bn 35.32 7.38 1.49 Bn

Industry Comparisons

Current Valuation

Metric Value Industry Percentile
EV to Assets 2.10 2.69
EV to Cash from Ops. 27.85 18.14
EV to Debt 2.93 52.51
EV to EBIT 23.55 19.22
EV to EBITDA 13.68 4.35
EV to Free Cash Flow [EV/FCF] 77.11 2.84
EV to Market Cap 1.43 1.52
EV to Revenue 5.81 4.79
Price to Book Value [P/B] 8.47 1.34
Price to Earnings [P/E] 84.15 22.02

Dividend Metrics

Metric Value Industry Percentile
Dividend Coverage Ratio 0.00 -1.96
Dividend Payout Ratio % 0.00 2.83
Dividend per Basic Share 0.00 0.19
FCF Dividend Payout Ratio % 0.00 1.92
Interest Coverage 1.75 -126.58

Growth Metrics

Metric Value Industry Percentile
Capex Growth (1y) % 13.95 -31.50
Cash and Equivalents Growth (1y) % -2.42 21.37
Dividend Growth (1y) % 0.00 0.24
EBIAT Growth (1y) % -18.56 -55.24
EBITDA Growth (1y) % 2.03 -447.96
EBIT Growth (1y) % -5.77 -40.50
EBT Growth (1y) % -9.37 -70.94
EPS Growth (1y) % -20.00 -70.02
FCF Growth (1y) % -16.35 56.33
Gross Profit Growth (1y) % 4.20 185.11

Liquidity Ratios

Metric Value Industry Percentile
Asset Utilization Ratio 0.36 0.56
Cash Payout Ratio 0.00 0.01
Cash Ratio 1.24 1.21
Current Ratio 2.38 2.64
Debt to Equity Ratio 4.14 -0.80
Interest Cover Ratio 1.75 -126.58
Times Interest Earned 1.75 -126.58

Profitability

Metric Value Industry Percentile
EBITDA Margin % 37.20 -129.91
EBIT Margin % 24.65 -156.71
EBT Margin % 10.60 -162.23
Gross Margin % 56.00 47.70
Net Profit Margin % 4.80 -189.30