STERIS plc (STE) stock analysis

P/E below its 5-year median

Steris's P/E of 30.4 is below its own 5-year median of 46.8.

P/E above the industry

Steris's P/E of 30.4 is above the Surgical, Medical, and Dental Instruments and Supplies median of 27.7.

EV/EBITDA below its 5-year median

Steris's EV/EBITDA of 15.8 is below its 5-year median of 18.0.

P/B above the industry

Steris's price-to-book of 3.44 is above the Surgical, Medical, and Dental Instruments and Supplies median of 3.20.

Trading below fair value

The share price of $256.27 is below our fair value estimate of $263.15.

Margin of safety under 20%

The price is 2.6% below fair value, less than the 20% cushion we look for.

Revenue growing under 10% a year

Revenue grew 9.4% a year over the last three fiscal years, short of the 10% we look for.

EPS growing 10%+ a year

Diluted EPS grew 95.0% a year over the last three fiscal years.

Earnings growth accelerating

Net income grew 20.1% over the last twelve months, against a 5-year average of 14.5% a year.

Growing slower than the industry

Revenue grew 8.1% over the last twelve months; the Surgical, Medical, and Dental Instruments and Supplies median is 11.0%.

Guidance lowered

Steris lowered its fiscal 2027 Free cash flow outlook on Aug 5, 2026.

Gross margin improving

Gross margin was 44.6% over the last twelve months, against 44.3% a year earlier.

Return on equity under 15%

Return on equity was 11.6% over the last twelve months and averaged 6.7% over five years; we look for 15% on both.

Return on capital over 10%

Return on invested capital was 10.0%, above the 10% that usually covers the cost of capital.

Return on equity above the industry

Steris's return on equity of 11.6% is above the Surgical, Medical, and Dental Instruments and Supplies median of -32.4%.

Earnings grew over 5 years

Net income grew 14.5% a year on average over the last five fiscal years.

Net margin above its 5-year average

Net margin was 13.4% over the last twelve months, against a 5-year average of 8.0%.

Net margin above the industry

Steris's net margin of 13.4% is above the Surgical, Medical, and Dental Instruments and Supplies median of -14.1%.

Low debt

Debt is 26.1% of shareholders' equity, under the 40% we consider low.

Debt falling against equity

Debt to equity fell from 42.5% five years ago to 26.1%.

Debt covered by cash flow

Operating cash flow over the last twelve months equals 68.1% of total debt.

Interest well covered

Operating income covers interest expense 20.5 times.

Short-term assets cover short-term debts

Current assets are 2.05 times current liabilities.

Low bankruptcy risk

The Altman Z-score is 5.87; above 3 is the safe zone and below 1.8 the distress zone.

Pays a dividend

Steris paid dividends worth 0.8% of the share price over the last twelve months.

Yield below Treasuries

The 0.8% yield is below the 4.4% on a 1-year Treasury.

Yield below the top quarter

The top quarter of US dividend payers yield 3.8% or more; Steris yields 0.8%.

Dividend not cut

The dividend per share has not fallen by more than 10% in any of the last 10 fiscal years.

Covered by earnings

Dividends take 30.5% of net income.

Covered by free cash flow

Dividends take 26.9% of free cash flow.