It has been about a month since the last earnings report for Steris (STE). Shares have lost about 2.2% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Steris due for a breakout? Well, first let's take a quick look at the latest earnings report in order to get a better handle on the recent catalysts for STERIS plc before we dive into how investors and analysts have reacted as of late.
STE Q3 Earnings Meet & Revenues Beat
STERIS plc (STE) reported third-quarter fiscal 2026 adjusted earnings per share (EPS) of $2.53, up 9% from the year-ago quarter’s figure. The figure matched the Zacks Consensus Estimate.
The adjustment excludes the impacts of certain non-recurring charges, such as the amortization of acquired intangible assets and acquisition and integration-related charges.
The company’s GAAP EPS was $1.96, up 12% from the year-ago level of $1.75.
STE’s Q3 Revenues in Detail
Revenues of $1.50 billion from continuing operations increased 9.5% year over year. The figure surpassed the Zacks Consensus Estimate by 1.1%.
Organic revenues at constant exchange rate or CER rose 8% year over year.
STE’s Quarterly Performance in Detail
The company operates under three segments — Healthcare, Applied Sterilization Technologies (“AST”) and Life Sciences.
Revenues at Healthcare rose 9% year over year to $1.10 billion (up 8% on a CER organic basis). This reflected an 11% improvement in service revenues, 8% growth in consumable revenues and a 7% rise in capital equipment revenues. The Zacks Consensus Estimate for revenues implies an improvement of 8.1% from the year-ago reported figure.
Revenues from AST improved 11% to $286.6 million (up 8% on a CER organic basis). This reflected 9% growth in service revenues and 103% growth in capital equipment revenues. The Zacks Consensus Estimate for revenues implies an increase of 8.1% year over year.
Revenues from the Life Sciences segment increased 7% to $145.8 million (up 5% year over year on a CER organic basis). This reflected 11% growth in consumable revenues, 7% growth in capital equipment revenues and flat service revenues. The Zacks Consensus Estimate for revenues suggests an increase of 8% year over year.
Margins
The gross profit in the reported quarter was $655.5 million, up 7.4% from the prior-year level. The gross margin contracted 72 basis points (bps) year over year to 43.8% due to a 10.6% increase in the cost of revenues.
STERIS witnessed a 5% year-over-year rise in selling, general and administrative expenses. The figure amounted to $352.3 million. Research and development expenses rose 7.7% to $29.5 million. Adjusted operating expenses totaled $381.8 million, up 5.2% year over year. The adjusted operating margin expanded 23 bps to 18.3%.
Financial Details
STERIS exited the third quarter of fiscal 2026 with cash and cash equivalents of $423.7 million compared with $319.2 million at the end of the fiscal second quarter.
Cumulative net cash provided by operating activities at the end of the fiscal third quarter was $1.01 billion compared with $887.3 million in the year-ago period. Further, the company has a five-year annualized dividend growth rate of 9.94%.
Guidance
STERIS has maintained its 2026 financial guidance.
It still expects revenues from continuing operations to increase approximately 8-9%. The Zacks Consensus Estimate is pegged at $5.93 billion, implying 8.6% growth from fiscal 2025.
Constant currency organic revenues are expected to improve approximately 7-8%.
Adjusted EPS is expected to be in the range of $10.15-$10.30. The Zacks Consensus Estimate for the metric is pegged at $10.23.
How Have Estimates Been Moving Since Then?
Since the earnings release, investors have witnessed a flat trend in fresh estimates.
VGM Scores
Currently, Steris has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with a D. Charting a somewhat similar path, the stock was allocated a score of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Steris has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Steris belongs to the Zacks Medical - Instruments industry. Another stock from the same industry, Hologic (HOLX), has gained 1.4% over the past month. More than a month has passed since the company reported results for the quarter ended December 2025.
Hologic reported revenues of $1.05 billion in the last reported quarter, representing a year-over-year change of +2.5%. EPS of $1.04 for the same period compares with $1.03 a year ago.
For the current quarter, Hologic is expected to post earnings of $1.08 per share, indicating a change of +4.9% from the year-ago quarter. The Zacks Consensus Estimate remained unchanged over the last 30 days.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #4 (Sell) for Hologic. Also, the stock has a VGM Score of B.
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STERIS plc (STE): Free Stock Analysis Report Hologic, Inc. (HOLX): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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