Results: Sotera Health Company Beat Earnings Expectations And Analysts Now Have New Forecasts

Sotera Health Company (NASDAQ:SHC) investors will be delighted, with the company turning in some strong numbers with its latest results. The company beat expectations with revenues of US$311m arriving 2.5% ahead of forecasts. Statutory earnings per share (EPS) were US$0.17, 6.3% ahead of estimates. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Sotera Health after the latest results.

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Following the latest results, Sotera Health's six analysts are now forecasting revenues of US$1.23b in 2026. This would be a satisfactory 6.5% improvement in revenue compared to the last 12 months. Per-share earnings are expected to soar 309% to US$0.80. In the lead-up to this report, the analysts had been modelling revenues of US$1.23b and earnings per share (EPS) of US$0.64 in 2026. Although the revenue estimates have not really changed, we can see there's been a massive increase in earnings per share expectations, suggesting that the analysts have become more bullish after the latest result.

Check out our latest analysis for Sotera Health

The consensus price target rose 8.3% to US$18.42, suggesting that higher earnings estimates flow through to the stock's valuation as well. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. There are some variant perceptions on Sotera Health, with the most bullish analyst valuing it at US$21.00 and the most bearish at US$16.00 per share. With such a narrow range of valuations, the analysts apparently share similar views on what they think the business is worth.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. We would highlight that Sotera Health's revenue growth is expected to slow, with the forecast 5.2% annualised growth rate until the end of 2026 being well below the historical 6.7% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 6.2% per year. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Sotera Health.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Sotera Health's earnings potential next year. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Sotera Health analysts - going out to 2027, and you can see them free on our platform here.

Before you take the next step you should know about the 3 warning signs for Sotera Health (1 is concerning!) that we have uncovered.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.