Steris Plc (STE) Financial Statements

Steris's financial health presents a mixed picture for a value investor focused on quality. The company shows consistent, mid-single-digit revenue growth of 9.2% YoY, which is positive but does not meet the framework's 'double-digit' benchmark for strong growth. Profitability is stable, with a 12.1% profit margin and a 15.9% operating margin, though the lack of gross margin data limits a full assessment. A key concern is the Return on Equity (ROE) of 10.7%, which falls meaningfully short of the framework's high-quality threshold of 15-20% for Return on Invested Capital (ROIC), indicating capital may not be deployed with exceptional efficiency. The Free Cash Flow (FCF) Yield of 3.6% translates to a P/FCF multiple near 28x, which is not low relative to the growth rate, and the yield itself is below the framework's >10-15% FCF margin ideal. Positively, the balance sheet is healthy with a conservative Debt/Equity ratio of 0.33, comfortably below the 1.0x Debt/EBITDA benchmark for a strong rating. Overall, Steris exhibits financial stability and low leverage, but its returns on capital and cash flow generation are more characteristic of an adequate rather than a high-quality business per the GoodMoat framework. Analysis based on data as of 2024-05-15.