Is STERIS Stock Underperforming the Nasdaq?

Mentor, Ohio-based STERIS plc (STE) provides infection prevention products and services. Valued at $21 billion by market cap, the company offers sterilizers, washers, surgical tables, lights and equipment management systems, and endoscopy accessories. 

Companies worth $10 billion or more are generally described as “large-cap stocks,” and STE perfectly fits that description, with its market cap exceeding this mark, underscoring its size, influence, and dominance within the medical devices industry. STE is a market leader in infection prevention, offering a unique mix of consumables and capital equipment. Its diverse portfolio makes it a one-stop solution for healthcare providers, driving revenue and customer retention.

Despite its notable strength, STE slipped 20.4% from its 52-week high of $269.44, achieved on Jan. 16. Over the past three months, STE stock has declined 14.8%, underperforming the Nasdaq Composite’s ($NASX) 4.7% losses during the same time frame.

Shares of STE fell 14.1% on a six-month basis and dipped 3.5% over the past 52 weeks, underperforming NASX’s six-month marginal losses and 27.8% returns over the last year.

To confirm the bearish trend, STE has been trading below its 200-day moving average since early March. The stock has been trading below its 50-day moving average since early February.

On Feb. 4, STE shares closed up by 1% after reporting its Q3 results. Its revenue was $1.50 billion, surpassing analyst estimates of $1.48 billion. The company’s adjusted EPS of $2.53 met Wall Street forecasts. 

STE’s rival, Stryker Corporation (SYK) has lagged behind the stock, plummeting 7.4% over the past 52 weeks, but outpaced the stock with 12.2% losses on a six-month basis.

Wall Street analysts are reasonably bullish on STE’s prospects. The stock has a consensus “Moderate Buy” rating from the nine analysts covering it, and the mean price target of $288.43 suggests a 34.4% potential upside from current price levels.