STERIS (NYSE: STE) Q4 2024 Earnings Report Analysis

Financial Highlights

* Revenue: $1.37 billion, a 5.6% YoY increase; missed analyst estimates by 0.6%
* Non-GAAP EPS: $2.32, in line with analyst estimates
* Adjusted full-year EPS guidance lowered slightly to $9.10
* Operating margin: 17.9%, up from 16.7% YoY
* Free cash flow margin: 17.8%, up from 13.3% YoY
* Constant currency revenue rose 6% YoY (10% YoY in the same quarter last year)

Company Overview

Steris (NYSE: STE) provides infection prevention, sterilization, and surgical support products for the healthcare, pharmaceutical, and research industries.

Industry Analysis: Surgical Equipment & Consumables

* Provides essential tools and products for surgeries and medical procedures
* Benefits from consistent demand, recurring revenue from consumables, and contracts with hospitals
* Faces challenges such as R&D costs, regulatory compliance, and price pressures

Sales Growth

* Sterling has grown its sales at a 12.6% CAGR over the past five years
* Annualized revenue growth in the last two years is 9.9%
* Constant currency revenue has grown at an average of 8.8% YoY

Profitability

* Adjusted operating margin has averaged 23.1% over the past five years
* Adjusted operating margin was 17.9% in Q4, similar to the same quarter last year

Earnings Per Share (EPS)

* Diluted EPS grew at a 10.3% CAGR over the past five years
* EPS in Q4 was $2.32, meeting analyst estimates
* Diluted shares outstanding have increased by 15.5% in the past five years, impacting EPS growth

Key Takeaways

* Revenue missed analyst estimates, while EPS was in line
* Full-year EPS guidance was lowered slightly
* The stock declined 1.2% following the earnings report

Investment Considerations

* Valuation, business qualities, and recent quarterly performance should be reviewed before making investment decisions
* Access our full research report (free) for further analysis and recommendations