Stock analysis · Bull Rankings model

STE analysis

STERIS plcMedical Devices. Scored on the same transparent 7-signal model behind the daily rankings.

STE
STERIS plc · Medical Devices
FCF$972mC+
Rev+8.7%B
D/E0.29B
P/E27.4xB
PEG1.71C+
70.1Score
$217.84$21.2B
1Y Target$256.86Analyst consensus · 7 analysts
5Y Target$376.06Compound horizon
10Y Target$557.87Long-dated conviction
FCF$972mTTM
C+
FCF $972m — respectable but not differentiating
Rev+8.7%TTM YoY
B
Revenue +8.7% — at or above S&P median
D/E0.29
B
D/E 0.29 — near the Healthcare debt median (≈60th pctile)
P/E27.4x
B
P/E 27.4 — near the Healthcare median (≈60th pctile)
PEG1.71
C+
PEG 1.71 — modest premium; above fair value

Forward price target — the 1-year figure is the analyst consensus where the stock is covered; the 5- and 10-year figures compound our earnings estimate from there. The DCF below is a separate cross-check on intrinsic value (what it's worth today), not another target.

Quality-growth score · 70.1
Quality0.68
Growth0.83
Value0.61
Why this score
  • Raising its dividend
Entry · Margin of safety
52-week rangeNear 52-week low
19% off the 12-month high
vs DCF fair value21% aboveest. fair value ~$180
What the price assumes: free cash flow compounding at ~11% a year for the next decade — vs the ~9% a year our model projects from current growth and analyst estimates.
Quality signals · context only
Gross profitability24% · Bgross profit ÷ total assets (Novy-Marx)
ROIC9.5% · Breturn on invested capital — not score-weighted
Why now
STERIS's Automated Endoscope Reprocessing systems are poised to capture the accelerating demand for infection‑prevention in hospitals, driving a compounding revenue engine. The business posted 8.7% YoY revenue growth, while generating $972 m of free cash flow and a solid 13.2% profit margin, underpinning the growth pillar of our model. The thesis rests on the continued rollout of these capital‑intensive sterilization solutions, which lock in recurring service contracts and create a high‑switching‑cost ecosystem.
Moat
The company's Applied Sterilization Technologies segment locks hospitals into long‑term service agreements for its automated reprocessing equipment, creating a cost‑advantaged, high‑switching‑cost moat. With a ROE of 10.9% driven by pricing power in a niche where compliance is non‑negotiable, competitors face steep capital and regulatory barriers to replicate STE's integrated hardware‑software‑service offering.
Risk
A bear sees the valuation stretched: the P/E of 27.4 exceeds the sector median, and the Bull Rankings model assumes an 11% annual free‑cash‑flow growth—well above the 8.7% revenue growth, suggesting optimism is baked in. Any slowdown in hospital capex or a successful cost‑cutting push by rivals could compress margins, and a rise in debt‑to‑equity above the current 0.29 would trigger a re‑rating. The bear case materializes if free cash flow growth falls below 8% and the stock slides toward its 52‑week low of $195.14.
Horizon
1-3 yr $256.86 (7-analyst consensus) — fundamentals + valuation re-rating. 5 yr $376.06 at ~12% CAGR — compounding case rests on the competitive position widening. 10 yr $557.87 if current growth sustains into durable earnings power.
Not investment advice. The Bull Rankings publishes a quantitative ranking model and accompanying analysis for general informational purposes only. Nothing on this page is a recommendation to buy, sell, or hold any security; nothing is personalized to your circumstances, risk tolerance, or tax situation. Investing carries the risk of loss — invest at your own risk and consider consulting a licensed financial professional before acting on anything you read here. See terms and methodology for full disclosures.
Trend
+0.8 over 22 daily scores
From 69.3 (Jun 22) → 70.1 (now)

One point per daily model run. The range autoscales, so a flat-looking line can still hide 1–2 point moves — read the From → To values for the actual range.

Shares to buy
9
Position size
$1,961
3.9% of portfolio
Stop price
$163.38
25% below $217.84
$ at risk if stopped
$490.14
budget $500.00 · 1% of portfolio

Math only — share count is floor(portfolio × risk% ÷ (price × stop%)). Doesn't account for commissions, slippage, gap risk, or position-correlation across your book. Inputs persist locally; never sent to the server. Not investment advice.

STERIS plc (STE): score, valuation & FAQ

STERIS plc (STE) is a Medical Devices company that scores 70.1 out of 100 on the Bull Rankings quality-growth model — a solid, above-average reading. The score blends three pillars — quality (durable returns, healthy margins, low leverage), growth (revenue and earnings), and value (valuation versus sector peers) — into one number, refreshed daily; it is a screen, not a buy recommendation.

On valuation, STE sits about 21% above our discounted-cash-flow fair value — the current price implies roughly 11% annual free-cash-flow growth over the next decade.

Is STE a good stock to buy?

Bull Rankings scores STE 70.1 out of 100 on its quality-growth model, which is a solid, above-average reading. A score is a quantitative screen of STERIS plc's fundamentals, not personalised financial advice — weigh it against your own time horizon and risk tolerance, and read the risk factors below before acting.

Why does STE score 70.1 on Bull Rankings?

The quality-growth score blends three pillars — quality (returns on capital, margins, leverage, earnings quality), growth (revenue and earnings expansion), and value (valuation versus sector peers). STE grades middle-of-pack across the strip. Each pillar is graded against sector-aware thresholds, then combined into the single 0–100 score.

Is STE overvalued or undervalued?

Based on $217.84, STE sits about 21% above our discounted-cash-flow fair value — the current price implies roughly 11% annual free-cash-flow growth over the next decade. It trades at a 27.4x× P/E (graded B). Discounted-cash-flow estimates are sensitive to growth and discount-rate assumptions, so treat this as a cross-check, not a price target.

What are the main risks of investing in STE?

A bear sees the valuation stretched: the P/E of 27.4 exceeds the sector median, and the Bull Rankings model assumes an 11% annual free‑cash‑flow growth—well above the 8.7% revenue growth, suggesting optimism is baked in. Any slowdown in hospital capex or a successful cost‑cutting push by rivals could compress margins, and a rise in debt‑to‑equity above the current 0.29 would trigger a re‑rating. The bear case materializes if free cash flow growth falls below 8% and the stock slides toward its 52‑week low of $195.14.

New to these metrics? The guides explain free cash flow, how the score works, and more in the learn hub — or run another name through the screener.

Bull Rankings is an automated fundamentals screen for research and education. It is not investment advice, and nothing here is a recommendation to buy or sell any security. Do your own research and consider consulting a licensed financial adviser.

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