Sotera Health Co (SHC)

Price$18.90Cached quoteAs of 2026-09-06 14:30 UTC

AI: Fair-priced

Price checkThe shares look fair-priced because improved earnings are offset by heavy debt and modest cash yield.

Trailing net income through June 2026 was about $163 million, versus $78 million for full-year 2025 and $44 million in 2024. The completed research indicated the shares were valued at roughly the mid-30s times recent reported earnings. That is not obviously cheap, especially because trailing free cash flow, meaning cash left after operations and capital spending, was only about $113 million. The valuation can work if earnings keep rising, but it offers limited protection if improvement stalls.

Big pictureRevenue keeps growing, but cash generation has been uneven and capital spending still absorbs a large share.

Revenue increased from $818 million in 2020 to $1.16 billion in 2025, then reached about $1.22 billion over the four quarters through June 2026. That steady top-line record suggests limited ordinary economic cyclicality. Cash results have been less durable: operating cash flow was negative $148 million in 2023, then recovered to $224 million in 2024 and $287 million in 2025. Recent capital spending remains substantial, so improving accounting earnings have not yet translated into an equally strong cash yield.

Business strengthLiquidity is comfortable and debt is falling, but leverage still limits the balance sheet's safety.

At June 2026, Sotera held about $357 million of cash against $2.14 billion of debt, leaving roughly $1.78 billion of net debt. Current assets of $646 million were almost three times current liabilities of $231 million, so near-term liquidity appears solid. Debt has declined from about $2.22 billion at the end of 2024. However, goodwill of $1.09 billion still exceeds shareholders' equity of $666 million, making the balance sheet less conservative than the liquidity figures alone suggest.

What could change the storyFaster cash growth and debt repayment would strengthen the case, while stalled earnings would weaken it quickly.

The strongest bull case is continued earnings recovery alongside lower capital spending and further debt reduction, which could lift free cash flow and justify today's relatively demanding earnings multiple. The bear case is that reported profit improves faster than cash while leverage remains high, leaving investors dependent on continued growth. Share count rose from about 283.5 million at the end of 2024 to 285.4 million by June 2026, showing modest dilution. Sustained free cash flow above recent levels would materially improve the valuation argument.

AI: News

Second-quarter earnings improvedSecond-quarter profit and cash generation strengthened, supporting expectations that the recent earnings recovery can continue.

For the quarter ended June 30, 2026, revenue reached about $321 million and net income rose to roughly $54 million. Operating cash flow was about $88 million, compared with capital spending near $46 million. Those figures were materially stronger than several earlier quarters and support the view that profitability is recovering. The retained research does not include a reliable contemporaneous share-price reaction, so no specific market move can be attributed to these results.

Debt reduction continuedDebt continued to decline while cash increased, modestly improving financial flexibility and reducing balance-sheet risk.

By June 30, 2026, total debt had fallen to about $2.14 billion from roughly $2.22 billion a year earlier, while cash stood near $357 million. Net debt was approximately $1.78 billion, an improvement from about $1.89 billion in June 2025. This matters because lower borrowing reduces financial risk and can eventually improve cash available to shareholders. The improvement is meaningful, although leverage remains substantial relative to annual earnings and recent free cash flow.

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Revenue

2019

2020

2021

2022

2023

2024

2025

Net income

2019

2020

2021

2022

2023

2024

2025

Free cash flow

2019

2020

2021

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2025

Total cash / debt

CashTotal debt

2019

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2025

Financial statements

	2025	2024	2023	2022	2021	2020	2019
Revenue	$1.16B	$1.10B	$1.05B	$1.00B	$931.5M	$818.2M	$778.3M
Gross profit	$645.5M	$602.3M	$577.2M	$557.0M	$518.7M	$443.6M	$395.4M
Gross margin	55.48%	54.73%	55.00%	55.50%	55.68%	54.22%	50.81%
Operating expenses	$283.5M	$304.7M	$300.5M	$308.7M	$261.9M	$237.6M	$211.8M
Operating income	$362.0M	$297.6M	$276.7M	$248.3M	$256.7M	$206.0M	$183.6M
Operating margin	31.11%	27.05%	26.37%	24.74%	27.56%	25.18%	23.59%
EBITDA	$439.9M	$381.9M	$353.3M	$312.6M	$320.9M	$269.3M	$250.3M
EBITDA margin	37.81%	34.71%	33.67%	31.15%	34.45%	32.92%	32.16%
Net income	$77.9M	$44.4M	$51.4M	−$233.6M	$116.9M	−$38.6M	−$20.9M
Net profit margin	6.70%	4.03%	4.90%	−23.27%	12.55%	−4.72%	−2.68%
Basic EPSper basic share	$0.27	$0.16	$0.18	-$0.83	$0.41	-$0.16	-$0.09
Diluted EPSper diluted share	$0.27	$0.16	$0.18	-$0.83	$0.41	-$0.16	-$0.09

Review official source filings ↗

Owners

Reported shareholders

Reference date Jun 30, 2026

9.48%of listed shares

Sessa Capital IM, L.P.27.05M shares · Jun 30, 2026

View holders

Top 20 reported holders of SHC
Holder	% owned
Sessa Capital IM, L.P.	9.48%27.05M shares
Darsana Capital Partners LP	9.46%27M shares
BlackRock, Inc.	8.46%24.15M shares
Sculptor Capital LP	8.41%24M shares
Sachem Head Capital Management LP	5.45%15.56M shares
VANGUARD CAPITAL MANAGEMENT LLC	4.27%12.17M shares
VANGUARD PORTFOLIO MANAGEMENT LLC	4.19%11.95M shares
AQR CAPITAL MANAGEMENT LLC	3.76%10.73M shares
T. Rowe Price Investment Management, Inc.	3.69%10.52M shares
Jupiter Topco LLC	2.94%8.4M shares
STATE STREET CORP	2.92%8.32M shares
FMR LLC	2.16%6.17M shares
Two Seas Capital LP	2.05%5.84M shares
Voss Capital, LP	2.04%5.83M shares
DIMENSIONAL FUND ADVISORS LP	2.03%5.8M shares
GEODE CAPITAL MANAGEMENT, LLC	1.83%5.22M shares
Irenic Capital Management LP	1.80%5.14M shares
DME Capital Management, LP	1.45%4.14M shares
LAKEWOOD CAPITAL MANAGEMENT, LP	1.39%3.98M shares
NORGES BANK	1.23%3.51M shares

Percentages use 285.36M shares of this listed class outstanding on Jun 30, 2026.

Gray completes the 100% scale. Reported positions may overlap; holders have different reporting dates.

Source: SEC Form 13F ↗Updated Sep 29, 2026 · Quarterly data

Insider buys & sells

Jul 1, 2024–Jun 30, 2026

Buys0$0.00 disclosed value

Sells (SEC code S)22$3.66B disclosed value

Transaction	Insider	Type	Shares	Price	Value	Owned after
May 13, 2026Form 4	Warburg Pincus (Cayman) XI, L.P. +7Director,TenPercentOwner	SellCommon Stock, $0.01 par value per share ("Common Stock") · indirect	19.10M	$15.17	$289.79M	0
May 13, 2026Form 4	Warburg Pincus XI, L.P. +9Director,TenPercentOwner	SellCommon Stock, $0.01 par value per share ("Common Stock") · indirect	19.10M	$15.17	$289.79M	0
May 13, 2026Form 4	GTCR FUND XI/C LP +4Director,TenPercentOwner	SellCommon Stock, $0.01 par value per share ("Common Stock") · indirect	12.74M	$15.17	$193.19M	0
Mar 6, 2026Form 4	Warburg Pincus Partners GP LLC +7Director,TenPercentOwner	SellCommon Stock, $0.01 par value per share ("Common Stock") · indirect	15.00M	$15.27	$229.05M	19.10M
Mar 6, 2026Form 4	Warburg Pincus Partners II, L.P. +9Director,TenPercentOwner	SellCommon Stock, $0.01 par value per share ("Common Stock") · indirect	15.00M	$15.27	$229.05M	19.10M