Sotera Health is a high-quality healthcare sterilization business with 123% free cash flow conversion, a Piotroski F-Score of 8/9, and three consecutive earnings beats, but single-supplier dependency on one ethylene oxide source and high leverage at 3.6x debt-to-equity constrain near-term entry.
Thesis pillars
- Eo Single Supplier Concentration↓Deteriorating
- High Quality Cash Conversion Business→Stable
- Strong Earnings Beat Streak→Stable
- +1 more pillar — see the Why tab for full reasoning
Pillars as of Jul 3, 2026, based on the 10-K filed Feb 24, 2026· older than 90 days
Sotera Health Company (SHC) Stock Analysis
Temporary headwind edge
Healthcare · Diagnostics & Research
Sell if holding. Momentum 3.3/10 is below the 5.0 floor at $16.39 — engine's falling-knife protection flags exit rather than catching a breakdown. Specifics: Leverage penalty (D/E 2.9): -1.5; Concentration risk — Supplier: EO single supplier.
Sotera Health provides outsourced sterilization (Sterigenics, Nordion) and lab testing (Nelson Labs) to medical device and pharmaceutical companies across 62 global facilities in 13 countries. Services are mandatory for regulatory compliance; customers in 2025 included over 40... Read more
Sell if holding. Momentum 3.3/10 is below the 5.0 floor at $16.39 — engine's falling-knife protection flags exit rather than catching a breakdown. Specifics: Leverage penalty (D/E 2.9): -1.5; Concentration risk — Supplier: EO single supplier. Chart setup: No clear chart pattern; technical signals are mixed. Score 5.8/10, moderate confidence.
Passes 4/7 gates (favorable risk/reward ratio, earnings proximity 109d clear, semi cycle peak clear, materials cycle peak clear). Fails on weak momentum and clean insider activity. Suitability: aggressive.
About Sotera Health Company
About Sotera Health Company
Sotera Health operates 62 sterilization and lab testing facilities across 13 countries, serving over 2,000 Sterigenics customers and approximately 3,000 Nelson Labs customers. More than 90% of Sterigenics revenues and approximately 90% of Nordion revenues in 2025 were from multi-year contracts, with Sterigenics achieving 100% renewal rates with its top 10 customers for more than five consecutive years. No single customer accounted for more than 10% of total revenues across either Sterigenics or Nelson Labs.
Sotera Health earns per-service fees through three business units. Sterigenics provides gamma irradiation (23 facilities), EO processing (17 facilities), and E-beam irradiation (8 facilities) services to medical device, pharmaceutical, food, and advanced applications customers. Nordion sells Co-60 radioactive isotope and gamma irradiation systems; Co-60 is sourced from contracts with three nuclear reactor operators covering 13 reactors at five Canadian and Russian generating stations, extending to dates between 2026 and 2064. Russian reactors contribute approximately 20% of long-term Co-60 supply and may reach roughly 50% in certain years due to variability at other reactor sites. EO supply in the United States comes from a single supplier with redundant production facilities. Applied Sterilization Technologies, a segment of STERIS plc, is the main global competitor to Sterigenics. Nelson Labs provides over 900 microbiological and analytical chemistry test types.
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Sotera Health faces an EO litigation overhang that could weigh on financial results. The company is currently defending lawsuits in California, Georgia, Illinois, and New Mexico alleging personal injury and property devaluation related to EO emissions from current and former facilities. Environmental liability insurance explicitly excludes EO claims, meaning settlements or adverse judgments would be largely uninsured. Compounding this, the single ocean carrier licensed to transport Co-60 from Russia to North America holds logistics licenses subject to renewal in 2026 and 2027 under the current sanctions framework — if those licenses cannot be renewed, Co-60 supply from Russian reactors could be disrupted.
See also: Healthcare · Diagnostics & Research
From Sotera Health Company's most recent 10-K filing, extracted June 11, 2026.
Recent developments
updated Nov 4, 2026Recent Developments — Sotera Health Company
Latest news
- NEWS JP Morgan Maintains Underweight on Sotera Health, Lowers Price Target to $15 — benzinga Nov 4, 2026 negative
- NEWS Sotera Health earnings loom as investors eye new CEO’s execution By Investing.com - Investing.com — Investing.com Aug 5, 2026 neutral
- NEWS Earnings To Watch: Sotera Health Co (SHC) Reports Q2 2026 Result - GuruFocus — GuruFocus Aug 5, 2026 neutral
- NEWS Earnings To Watch: Sotera Health Co (SHC) Reports Q2 2026 Result - Yahoo Finance — Yahoo Finance Aug 5, 2026 neutral
- NEWS Sotera Health Company (SHC) Q2 Earnings Report Preview: What To Look For - StockStory — StockStory Aug 5, 2026 positive
Latest item Nov 4, 2026 · Generated 2026-11-05T11:44:09Z.
Upcoming dated catalysts
Thesis
Key Metrics
Quality Signals
Options Flow
Concentration Risks(10-K Item 1A)
- HIGHSupplierEO single supplier10-K Item 1A: 'in the United States there is a single supplier for EO for our sterilization business'
- MEDIUMSupplierRussian nuclear reactors10-K Item 1A: 'We estimate approximately 20% of our long-term supply of Co-60 will be generated by Russian nuclear reactors... may increase to as much as approximately 50%'
Material Events(8-K, last 90d)
- 2026-05-13Item 1.02MEDIUMStockholders Agreement (dated November 19, 2020) among Sotera Health and Sponsor-affiliated stockholders terminated May 13, 2026 per its terms, following secondary offering of 31,838,253 shares at $15.168/share by Selling Stockholders via Goldman Sachs.SEC filing →
- 2026-05-05Item 5.02MEDIUMSotera Health announced leadership transition effective May 1, 2026 per executive succession plans; specific departing and incoming officer details not fully available (8-K body truncated in source).SEC filing →
- 2026-03-16Item 5.02LOWConstantine Mihas resigned as Class I director effective March 16, 2026, due to reduction in director designation rights for Sponsors. No disagreement cited. Kenneth Krause appointed as replacement.SEC filing →
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results. How we score · Editorial policy
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Rating Breakdown
1 floor-breaker
Price action weak — below key moving averages, no momentum carry. Needs a base before trend-continuation setups apply.static
Price Targets
Position Sizing
Risk Alerts
Earnings
Verdict History
Frequently Asked Questions
Sell if holding. Momentum 3.3/10 is below the 5.0 floor at $16.39 — engine's falling-knife protection flags exit rather than catching a breakdown. Specifics: Leverage penalty (D/E 2.9): -1.5; Concentration risk — Supplier: EO single supplier. Chart setup: No clear chart pattern; technical signals are mixed. Prior stop was $15.42. Score 5.8/10, moderate confidence.
Analyst target: $19.29 (+17.7% upside). Prior stop was $15.42. Stop-loss: $15.42.
Concentration risk — Supplier: EO single supplier; Leverage penalty (D/E 2.9): -1.5; Negative momentum.
Sotera Health Company trades at a P/E of 27.3 (forward 15.2). TrendMatrix value score: 7.5/10. Verdict: Sell.
15 analysts rate SHC, with a consensus score of 4.1/5. 9 analysts publish price targets averaging $22.
What does Sotera Health Company do?Sotera Health provides outsourced sterilization (Sterigenics, Nordion) and lab testing (Nelson Labs) to medical device...
Sotera Health provides outsourced sterilization (Sterigenics, Nordion) and lab testing (Nelson Labs) to medical device and pharmaceutical companies across 62 global facilities in 13 countries. Services are mandatory for regulatory compliance; customers in 2025 included over 40 of the top 50 medical device companies. Multi-year contracts covered 90%+ of Sterigenics and Nordion revenues.