STERIS’s fourth quarter results received a negative reaction from the market despite surpassing Wall Street’s revenue expectations and reporting adjusted earnings per share in line with consensus. Management attributed the quarter’s performance to broad-based volume growth across all segments, with particular strength in healthcare services and consumables. However, CEO Daniel Carestio acknowledged that margin pressures from increased tariffs and inflation more than offset the positive impacts of pricing and productivity improvements. As Carestio explained, “Included in that number is approximately $16 million of pretax tariff impact, which primarily impacted our healthcare segment.”
Is now the time to buy STE? Find out in our full research report (it’s free for active Edge members).
STERIS (STE) Q4 CY2025 Highlights:
- Revenue: $1.50 billion vs analyst estimates of $1.48 billion (9.2% year-on-year growth, 1% beat)
- Adjusted EPS: $2.53 vs analyst estimates of $2.53 (in line)
- Adjusted EBITDA: $406.3 million vs analyst estimates of $407 million (27.2% margin, in line)
- Management reiterated its full-year Adjusted EPS guidance of $10.23 at the midpoint
- Operating Margin: 18.3%, in line with the same quarter last year
- Constant Currency Revenue rose 7.8% year on year (6% in the same quarter last year)
- Market Capitalization: $24 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From STERIS’s Q4 Earnings Call
- Brett Adam Fishbin (KeyBanc): Asked about expected growth rates for healthcare and AST segments in the coming quarter. CFO Karen Burton clarified that service growth is slowing and AST will face tough comparisons due to last year’s strong capital sales.
- Mac Etoch (Stephens): Inquired about life sciences customer demand and U.S. onshoring trends. CEO Daniel Carestio responded that new pharmaceutical capacity investments in the U.S. are driving demand for STERIS’s aseptic manufacturing products.
- Michael Polark (Wolfe Research): Questioned the magnitude and timing of tariff costs. Burton explained that $55 million in tariffs is an annual run rate and is being incurred across all quarters, with incremental impact expected to be limited in the next year.
- Patrick Wood (Morgan Stanley): Asked about the regulatory shift of surgeries to ambulatory surgery centers and its impact. Carestio noted this trend increases demand for sterilization services, benefiting STERIS.
- Mike Matson (Needham & Company): Queried about the lack of recent large acquisitions. Carestio said STERIS is disciplined in M&A, focusing on bolt-on deals and waiting for opportunities that fit strategic criteria.
Catalysts in Upcoming Quarters
In the coming quarters, our analysts will watch for (1) the pace of tariff mitigation and its effect on operating margins, (2) sustained demand for healthcare services and capital equipment amid signs of deceleration, and (3) continued momentum in life sciences as pharmaceutical capacity expands. Execution on cost control and successful navigation of regulatory shifts will also be important indicators.
STERIS currently trades at $245.32, down from $264.27 just before the earnings. In the wake of this quarter, is it a buy or sell? The answer lies in our full research report (it’s free).
Our Favorite Stocks Right Now
If your portfolio success hinges on just 4 stocks, your wealth is built on fragile ground. You have a small window to secure high-quality assets before the market widens and these prices disappear.
Don’t wait for the next volatility shock. Check out our Top 5 Growth Stocks for this month. This is a curated list of our High Quality stocks that have generated a market-beating return of 244% over the last five years (as of June 30, 2025).
Stocks that have made our list include now familiar names such as Nvidia (+1,326% between June 2020 and June 2025) as well as under-the-radar businesses like the once-micro-cap company Kadant (+351% five-year return). Find your next big winner with StockStory today.
/Microsoft%20sign%20at%20the%20headquarters%20by%20VDB%20Photos%20via%20Shutterstock.jpg)
