STERIS (STE) Stock Forecast & Price Target

Steris reported total revenue of $1,480.5 million for F4Q25, reflecting a 5.0% year-over-year increase on an organic basis, with a stronger performance of 5.9% when adjusted for constant currency. The company's EBIT margin also demonstrated positive momentum, rising by 110 basis points year-over-year, highlighting improved operational efficiency. Furthermore, Steris achieved a quarterly earnings per share (EPS) of $2.74, a 14% increase from the prior year, aided by reduced interest expenses following the strategic divestiture of its dental segment.

Steris has reported a notable decline in capital equipment sales, experiencing a decrease of approximately 16% year-over-year, which raises concerns over future revenue generation in a segment that is crucial for overall growth. Additionally, service revenues have fallen by 21% year-over-year, and although consumables showed an 8% increase, the overall revenue mix reflects significant weakness in essential areas of the business. The company's capital equipment backlog has also diminished by $66 million compared to the previous fiscal quarter, indicating potential challenges in sustaining earnings and dividend growth without a recovery in capital equipment demand.