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STERIS (STE) Strategic Growth Strong, Competition a Woe
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On Aug 27, we issued an updated research report on STERIS plc(STE - Free Report) . The company has been actively trying to expand into the adjacent markets and strengthen its core business through acquisitions and dilutions.
A tough competitive landscape and currency headwinds continue to pose threats to STERIS. Moreover, customer consolidation is a concern for the company. The stock carries a Zacks Rank #4 (Sell).
However, STERIS exited first-quarter fiscal 2019 on a promising note. We are also encouraged by the favorable underlying market trends along with new product and service offerings. The company's strong organic growth across Healthcare Products, Healthcare Specialty Services, Applied Sterilization Technologies and Life Sciences segments also buoys optimism. Further, growth in free cash flow reserve is indicative of the company’s cash balance strength. It has also made certain divestments and organizational changes, expected to suit its operations better.
Shares of this developer, manufacturer and marketer of infection prevention, decontamination, microbial reduction plus surgical and gastrointestinal support products and services have outperformed its industry over the past three months. The stock has gained 10.9% against the 2.3% fall of the industry.
Of late, STERIS has been growing its footprint into adjacent markets via acquisitions and dilutions. Following the Synergy Health buyout, the company sold the Synergy Health Healthcare Consumable Solutions (HCS) business to Vernacare last November. The HCS business used to generate roughly $40 million of annual revenues.
Meanwhile, STERIS competes for pharmaceutical, research and industrial customers against several large companies with extensive product portfolios and a global reach. It also contends against small entities with limited product offerings and operations in one or across a few countries.
A fierce competition looming large bothers the company as new infection prevention, sterile processing, contamination control, gastrointestinal and surgical support products and services flood the market. This in turn, might hinder STERIS' growth considerably.
Moreover, multiple STERIS' clients are undergoing consolidation, partly due to healthcare cost-reduction measures, initiated by competitive pressures as well as legislators, regulators and third-party payors. We presume that if the company fails to check its customer consolidation rate now, it will adversely impact its business as well as the finances.
Key Picks
Some better-ranked stocks in the broader medical space are Integer Holdings Corporation (ITGR - Free Report) , Intuitive Surgical (ISRG - Free Report) and Masimo Corporation (MASI - Free Report) .
Intuitive Surgical’s expected long-term earnings growth rate is 14.7%. The stock carries a Zacks Rank #2 (Buy).
Masimo’s expected long-term earnings growth rate is 14.8%. The stock has a Zacks Rank of 2.
Wall Street’s Next Amazon
Zacks EVP Kevin Matras believes this familiar stock has only just begun its climb to become one of the greatest investments of all time. It’s a once-in-a-generation opportunity to invest in pure genius.
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STERIS (STE) Strategic Growth Strong, Competition a Woe
On Aug 27, we issued an updated research report on STERIS plc (STE - Free Report) . The company has been actively trying to expand into the adjacent markets and strengthen its core business through acquisitions and dilutions.
A tough competitive landscape and currency headwinds continue to pose threats to STERIS. Moreover, customer consolidation is a concern for the company. The stock carries a Zacks Rank #4 (Sell).
However, STERIS exited first-quarter fiscal 2019 on a promising note. We are also encouraged by the favorable underlying market trends along with new product and service offerings. The company's strong organic growth across Healthcare Products, Healthcare Specialty Services, Applied Sterilization Technologies and Life Sciences segments also buoys optimism. Further, growth in free cash flow reserve is indicative of the company’s cash balance strength. It has also made certain divestments and organizational changes, expected to suit its operations better.
Shares of this developer, manufacturer and marketer of infection prevention, decontamination, microbial reduction plus surgical and gastrointestinal support products and services have outperformed its industry over the past three months. The stock has gained 10.9% against the 2.3% fall of the industry.
Of late, STERIS has been growing its footprint into adjacent markets via acquisitions and dilutions. Following the Synergy Health buyout, the company sold the Synergy Health Healthcare Consumable Solutions (HCS) business to Vernacare last November. The HCS business used to generate roughly $40 million of annual revenues.
STERIS plc Price
STERIS plc Price | STERIS plc Quote
Meanwhile, STERIS competes for pharmaceutical, research and industrial customers against several large companies with extensive product portfolios and a global reach. It also contends against small entities with limited product offerings and operations in one or across a few countries.
A fierce competition looming large bothers the company as new infection prevention, sterile processing, contamination control, gastrointestinal and surgical support products and services flood the market. This in turn, might hinder STERIS' growth considerably.
Moreover, multiple STERIS' clients are undergoing consolidation, partly due to healthcare cost-reduction measures, initiated by competitive pressures as well as legislators, regulators and third-party payors. We presume that if the company fails to check its customer consolidation rate now, it will adversely impact its business as well as the finances.
Key Picks
Some better-ranked stocks in the broader medical space are Integer Holdings Corporation (ITGR - Free Report) , Intuitive Surgical (ISRG - Free Report) and Masimo Corporation (MASI - Free Report) .
Integer Holdings’ expected long-term earnings growth rate is 15%. The stock sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Intuitive Surgical’s expected long-term earnings growth rate is 14.7%. The stock carries a Zacks Rank #2 (Buy).
Masimo’s expected long-term earnings growth rate is 14.8%. The stock has a Zacks Rank of 2.
Wall Street’s Next Amazon
Zacks EVP Kevin Matras believes this familiar stock has only just begun its climb to become one of the greatest investments of all time. It’s a once-in-a-generation opportunity to invest in pure genius.
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