Steris (STE) Down 2.1% Since Last Earnings Report: Can It Rebound?

It has been about a month since the last earnings report for Steris (STE). Shares have lost about 2.1% 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 its most recent 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.

STERIS Tops Q1 Earnings Estimates

STERIS plc reported first-quarter fiscal 2027 adjusted earnings of $2.59 per share, up 10.7% year over year. The bottom line beat the Zacks Consensus Estimate by 1.97%, supported by higher volume, pricing, productivity and a favorable business mix.

On a GAAP basis, earnings were $2.04 per share compared with $1.79 per share.

Revenues rose 7.3% to $1.49 billion but missed the consensus mark by 0.83%. Constant-currency organic revenues increased 6.2%, while total backlog advanced 7.7% year over year to $553.9 million. 

STERIS Posts Broad Segment Gains

Healthcare revenues increased 7.6% to $1.05 billion. Service revenues grew 9.6%, consumables revenues advanced 9.2% and capital equipment revenues rose 1.4%. Constant-currency organic growth was 6.4%. Healthcare operating income increased 10.5% to $260.2 million. The improvement reflected higher volume, pricing, productivity and favorable mix, partly offset by inflation and increased tariff costs. The segment’s backlog rose 10% to $444 million. 

AST revenues rose 5.8% to $297.6 million, driven by 6% service growth despite a 13% decline in capital equipment revenues. Segment operating income increased 4.5% to $142.9 million, as improved pricing was partly offset by higher depreciation and labor costs.

Life Sciences revenues climbed 8.6% to $146.7 million. Capital equipment revenues rose 17%, consumables increased 8% and service revenues grew 2%. Operating income advanced 5.3% to $61.8 million, aided by improved pricing and volume but restrained by inflation and lower productivity. 

STE Expands Adjusted Profitability

Gross profit increased to $684.2 million from $628 million in the prior-year quarter. Gross margin expanded 69 basis points (bps) year over year to 45.8%, despite a 6% increase in cost of revenues.

Selling, general and administrative expenses increased 4.5% to $369.7 million, while research and development expenses rose 8.3% to $28.6 million. Total operating expenses increased 4.3% to $398.3 million. Adjusted income from operations advanced 12% to $354.8 million and the adjusted operating margin expanded 99 bps to 23.8%.

STERIS Builds Cash and Financial Flexibility

Cash and cash equivalents increased to $482.3 million as of June 30, 2026, from $439.6 million as of March 31, 2026. Long-term indebtedness declined to $1.65 billion from $1.81 billion.

Cumulative cash flow from operating activities totaled $367.1 million compared with $420 million a year ago. The company also repurchased $115.5 million of ordinary shares and paid $61.4 million in dividends during the quarter. 

STE Reaffirms Fiscal 2027 Outlook

STERIS reiterated fiscal 2027 as-reported revenue growth guidance of 7-8%. Constant-currency organic revenue growth is still expected in the range of 6-7%.

Adjusted earnings per share are projected to be between $11.10 and $11.30. 

How Have Estimates Been Moving Since Then?

Analysts were quiet during the last two month period as none of them issued any earnings estimate revisions.

VGM Scores

Currently, Steris has a average Growth Score of C, though it is lagging a bit on the Momentum Score front with a D. Charting a somewhat similar path, the stock has 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, OPKO Health (OPK), has gained 22% over the past month. More than a month has passed since the company reported results for the quarter ended June 2026.

OPKO Health reported revenues of $163.5 million in the last reported quarter, representing a year-over-year change of +4.3%. EPS of -$0.01 for the same period compares with -$0.19 a year ago.

For the current quarter, OPKO Health is expected to post a loss of $0.07 per share, indicating a change of -333.3% from the year-ago quarter. The Zacks Consensus Estimate has changed +2.7% over the last 30 days.

The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for OPKO Health. Also, the stock has a VGM Score of D.

Research Chief Names "Single Best Pick to Double"

From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.

This company targets millennial and Gen Z audiences, generating nearly $1 billion in revenue last quarter alone. A recent pullback makes now an ideal time to jump aboard. Of course, all our elite picks aren’t winners but this one could far surpass earlier Zacks’ Stocks Set to Double like Nano-X Imaging which shot up +129.6% in little more than 9 months.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research