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Mentor, Ohio-based STERIS plc (STE) provides infection prevention products and services worldwide. With a market cap of $20.7 billion, STERIS operates through Healthcare, Applied Sterilization Technologies (AST), and Life Sciences segments.
Companies worth $10 billion or more are generally described as "large-cap stocks," STERIS fits right into that category, with its market cap exceeding this threshold, reflecting its substantial size, influence, and dominance in the medical devices industry. It serves its products and services to hospitals, other healthcare providers, and pharmaceutical manufacturers.
Despite its notable strengths, STERIS has plummeted 16.6% from its 52-week high of $248.24 achieved on Sept. 13. Furthermore, STE stock has plunged nearly 13.2% in the past three months, underperforming the Nasdaq Composite’s ($NASX) 10.4% surge during the same time frame.
STERIS performance has remained grim over the longer term as well. STE stock has dipped over 5.8% on a YTD basis and nearly 4% in the past 52 weeks, compared to NASX’s 29.2% surge in 2024 and 30.1% returns over the past year.
To confirm the bearish trend, STE has traded mostly below its 50-day moving average since the start of October and consistently below its 200-day moving average since early November.
STERIS stock dropped nearly 5.3% in the trading session after the release of its mixed Q2 results on Nov. 6. The company’s total revenues grew 7.3% year-over-year to $1.3 billion, which missed Wall Street’s expectations by 60 basis points. Meanwhile, due to an 8.4% increase in the cost of revenues to $750.1 million, STERIS’ gross margin contracted 56 basis points compared to the year-ago quarter to 43.6%. This resulted in its gross profits growing by a modest 6% year-over-year to $578.8 million, unsettling investor confidence.
Despite these challenges, STERIS demonstrated remarkable expense management, significantly cutting both operating and non-operating expenses, which resulted in a 15.1% year-over-year growth in adjusted EPS to $2.14, exceeding analysts’ estimates by 1.4%.
STERIS has outperformed its peer Zimmer Biomet Holdings, Inc.’s (ZBH) 13% decline on a YTD basis and a 10.9% drop in the past year.
Among the seven analysts covering the STE stock, the consensus rating is a “Strong Buy.” The mean price target of $255.83 represents a 23.6% premium to current price levels.
