Unveiling the Investment Potential of Steris PLC (STE): A Comprehensive Analysis of Financial ...
Steris PLC (NYSE:STE) has recently been in the spotlight, drawing interest from investors and financial analysts due to its robust financial stance. With shares currently priced at $225.83, Steris PLC has witnessed a daily gain of 2.34%, marked against a three-month change of 5.94%. A thorough analysis, underlined by the GuruFocus Score Rating, suggests that Steris PLC is well-positioned for substantial growth in the near future.
Decoding the GF Score
The GF Score is a stock performance ranking system developed by GuruFocus using five aspects of valuation, which has been found to be closely correlated to the long-term performances of stocks by backtesting from 2006 to 2021. The stocks with a higher GF Score generally generate higher returns than those with a lower GF Score. Therefore, when picking stocks, investors should invest in companies with high GF Scores. The GF Score ranges from 0 to 100, with 100 as the highest rank.
Here is the breakdown of Steris PLC's GF Score:
Financial strength rank: 6/10
Profitability rank: 9/10
Growth rank: 9/10
GF Value rank: 6/10
Momentum rank: 9/10
Each one of these components is ranked and the ranks also have positive correlation with the long term performances of stocks. The GF score is calculated using the five key aspects of analysis. Through backtesting, we know that each of these key aspects has a different impact on the stock price performance. Thus, they are weighted differently when calculating the total score. With high ranks in profitability, growth, and momentum, and decent ranks in financial strength and GF value, GuruFocus assigned Steris PLC the GF Score of 93 out of 100, which signals the highest outperformance potential.
Understanding Steris PLC's Business
Steris is an Ireland-domiciled medical device company focused on sterilization services and infection prevention. The company is the global leader in contract sterilization services, ensuring the safe delivery of single-use and implantable medical equipment to hospitals around the world. Additionally, Steris sells sterilizers, washer-disinfectors, and other decontamination equipment and supplies for use by care provider facilities and in biopharma manufacturing sites. Domiciled in the United States before its 2015 inversion to Ireland, the firm continues to derive roughly 70% of revenue from its U.S. operations, 10% from the United Kingdom, and the remaining 20% from other international regions.
Here is the income breakdown of Steris PLC:
Financial Strength Breakdown
According to the Financial Strength rating, Steris PLC's robust balance sheet exhibits resilience against financial volatility, reflecting prudent management of capital structure. The Interest Coverage ratio for Steris PLC stands impressively at 6.59, underscoring its strong capability to cover its interest obligations. This robust financial position resonates with the wisdom of legendary investor Benjamin Graham, who favored companies with an interest coverage ratio of at least 5. With a favorable Debt-to-Revenue ratio of 0.61, Steris PLC's strategic handling of debt solidifies its financial health.
Profitability Rank Breakdown
The Profitability Rank shows Steris PLC's impressive standing among its peers in generating profit. Furthermore, Steris PLC's Gross Margin has seen a consistent rise over the past five years, as evidenced by the data: 2019: 42.23; 2020: 43.55; 2021: 43.22; 2022: 43.98; 2023: 43.56; . This trend underscores the company's growing proficiency in transforming revenue into profit. Steris PLC's strong Predictability Rank of 3.5 stars out of five underscores its consistent operational performance, providing investors with increased confidence.
Growth Rank Breakdown
Ranked highly in Growth, Steris PLC demonstrates a strong commitment to expanding its business. The company's 3-Year Revenue Growth Rate is 11.8%, which outperforms better than 62.38% of 731 companies in the Medical Devices & Instruments industry.
Conclusion
With its strong financial strength, impressive profitability, and robust growth metrics, Steris PLC stands out as a promising investment opportunity. The GuruFocus Score Rating further highlights the firm's unparalleled position for potential outperformance. For investors seeking to capitalize on this potential, Steris PLC presents a compelling case.
GuruFocus Premium members can find more companies with strong GF Scores using the following screener link: GF Score Screen
This article first appeared on GuruFocus.
