STERIS plc STE is poised to unveil its first-quarter fiscal 2025 outcomes on August 6.
Historical Earnings Surprises
STERIS boasts a robust history of exceeding earnings expectations. Out of the last four quarters, it outshone projections three times, falling short only once, with an average surprise of 2.21%.
Notably, in the previous quarter, the company reported adjusted earnings per share of $2.41, consistent with the Zacks Consensus Estimate.
Projections for Q1
The Zacks Consensus Estimate for STERIS’ first-quarter fiscal 2025 revenues stands at $1.26 billion, reflecting a 1.7% decline from the corresponding year-ago period.
Meanwhile, the projected EPS of $2.03 hints at a 1.5% year-over-year increase.
Pre-Earnings Estimate Revisions
Over the past 30 days, estimates for STERIS’ fiscal Q1 earnings have held steady at $2.03 per share.
Before the big reveal, let’s delve into the factors that could have shaped STERIS’ journey leading up to this announcement.
Influence of Various Factors
Healthcare
The Healthcare sector witnessed robust growth in the previous quarter, driven by positive pricing and high productivity, which helped counterbalance macro headwinds affecting other segments. With a favorable pricing environment and stabilizing macroeconomic factors, STERIS is likely to have sustained its positive momentum in Q1 2025.
The normalization of the Healthcare backlog, alongside efforts to enhance lead times, may have bolstered the company’s performance. Additionally, strategic restructuring initiatives are expected to have positively impacted the Healthcare segment.
Our analysis indicates a 7.1% improvement in Healthcare revenues from the previous year.
Applied Sterilization Technologies (AST)
Challenges faced by AST in prior quarters, including inventory destocking and reduced demand, might have persisted in the latest quarter. However, signs of recovery in MedTech demand and a projected uptick in the second half of 2025 could be on the horizon.
Our forecast suggests a 6.4% revenue growth for AST in the fiscal first quarter.
Life Sciences
The divestiture of the Controlled Environmental Services business within the Life Sciences segment, as mentioned in STERIS’ fiscal 2025 guidance, is anticipated to have influenced revenues positively. The company’s performance aligned with long-term expectations, likely continuing through the latest quarter.
Based on our model, we predict a 5.8% revenue increase in the Life Sciences segment for Q1.
Dental
STERIS recently finalized the sale of its Dental segment and is expected to report one month of Dental business sales for Q1. The proceeds from this sale are designated for debt repayment.
Model Insights
According to our methodology, stocks with a Zacks Rank #1 (Strong Buy), 2 (Buy), or 3 (Hold) paired with a positive Earnings ESP stand a greater chance of surpassing estimates, a scenario not anticipated for STERIS.
Earnings ESP: STERIS registers an Earnings ESP of 0.00%.
Zacks Rank: Currently holding a Zacks Rank #2.
Promising Alternatives
For investors seeking potential opportunities, other medical stocks to consider include:
Hims & Hers Health HIMS with an Earnings ESP of +19.28%.
TransMedics Group TMDX with an Earnings ESP of +23.54%.
Tenet Healthcare THC with an Earnings ESP of +4.11%.
Each stock presents unique growth potentials and financial outlooks for interested investors.
