Abstract

STERIS plc will release fiscal third-quarter 2026 results on February 04, 2026 Post Market, with current projections pointing to revenue of $1.48 billion and adjusted EPS of $2.53 as investors monitor margin resilience and segment execution across Healthcare and Applied Sterilization Technologies.

Market Forecast

Consensus for the fiscal third quarter of 2026 calls for revenue of $1.48 billion, up 7.17% year over year, adjusted EPS of $2.53, up 8.98% year over year, and EBIT of $341.88 million, up 6.50% year over year. While specific gross margin and net margin forecasts are not provided, the setup implies stable operating performance and ongoing expense discipline following the last quarter’s outperformance.

The Healthcare segment, which represented 70.79% of last quarter’s revenue, is expected to remain the core earnings engine as the company executes on consumables, services, and capital equipment cycles with disciplined pricing and improved mix. The most promising growth contribution is expected from Applied Sterilization Technologies, which generated $281.50 million in revenue last quarter and benefits from high-visibility, recurring service demand and a deep, contractual customer base that supports incremental operating leverage.

Last Quarter Review

In the prior quarter (fiscal second quarter of 2026), STERIS plc reported revenue of $1.46 billion, up 9.89% year over year, gross profit margin of 44.16%, GAAP net income attributable to the parent company of $192.00 million with a net profit margin of 13.14%, and adjusted EPS of $2.47, up 15.42% year over year. A notable highlight was a clean beat versus expectations, with revenue exceeding estimates by $28.89 million and adjusted EPS topping estimates by $0.12, showcasing continued operating momentum.

By business line, Healthcare delivered $1.03 billion (70.79% of total), Applied Sterilization Technologies contributed $281.50 million (19.28%), and Life Sciences added $145.00 million (9.93%), reflecting a balanced mix of consumables, services, and high-visibility service revenue that underpinned the quarter’s improved profitability.

Current Quarter Outlook (with major analytical insights)

Healthcare segment: execution, mix, and margin sustainability

Healthcare remains the linchpin of earnings and cash generation given its scale and breadth across consumables, services, and capital equipment. For fiscal third quarter, the central question is whether the strong gross margin of 44.16% in the prior quarter can be sustained as pricing, volume, and mix evolve into year-end. Consumable pull-through and service attachment rates are likely to be focal points, because higher attachment typically supports steadier revenue conversion and a more resilient margin profile through the quarter. On the capital side, the cadence of shipments and installation timing can introduce quarter-to-quarter variability; investors will watch whether order conversion continues to trend favorably without elevating logistics or installation costs. Cost normalization and disciplined operating expense management remain essential to preserving the net profit margin backdrop near the 13.14% level observed last quarter, even if gross margin fluctuates modestly. Together, these elements set the stage for adjusted EPS to track toward the $2.53 forecast, contingent on steady execution and no material slippage in customer delivery schedules.

Applied Sterilization Technologies (AST): recurring revenue and operating leverage

Applied Sterilization Technologies generated $281.50 million last quarter, reinforcing the durability of its recurring service revenue and the predictability that comes from long-term customer contracts. Into fiscal third quarter, the business appears positioned to contribute steady growth as customers sustain demand for outsourced sterilization services and processing schedules remain tight. The key margin driver is facility utilization: strong, consistent throughput tends to support operating leverage on a stable cost base, enhancing the segment’s contribution to EBIT. Pricing discipline, balanced with high service quality and reliable turnaround, helps offset inflationary cost pockets that can emerge in energy, labor, or maintenance. Investors will pay close attention to commentary around throughput, lead times, and capacity allocation, because these indicators often correlate with near-term EBIT momentum and the company’s ability to convert revenue into profit in the segment. With consensus EBIT expected at $341.88 million for the quarter at the consolidated level, AST’s efficient execution can be an important swing factor should Healthcare trends land in line with expectations.

Key stock price drivers this quarter

Stock performance is most sensitive to revenue and EPS deviation versus the $1.48 billion and $2.53 benchmarks, respectively, as well as to any commentary that alters the path of margins into the fourth quarter of the fiscal year. A modest gross margin expansion or contraction can carry an outsized impact on EPS, especially given the company’s mix of consumables and services; investors will scrutinize whether operating leverage continues at a pace consistent with the last quarter’s net margin of 13.14%. Cash conversion and free cash flow cadence also matter: clarity on working capital trends, inventory timing, and receivables collection can influence confidence in capital allocation plans. Management color on capital priorities—particularly the balance between organic investment, pipeline expansion in services, and potential bolt-on opportunities—can affect the multiple, even if near-term revenue and EPS land in line. Finally, any forward-looking commentary on order visibility in Healthcare and throughput expectations in AST will shape investor conviction about the durability of growth implied by the 7.17% revenue and 8.98% EPS year-over-year forecasts.

Analyst Opinions

Bullish views comprise 100.00% of the tracked opinions during the period, with prominent coverage reiterating constructive stances ahead of the fiscal third-quarter print. Piper Sandler maintained a Buy rating and set a price target of $285.00, reflecting confidence in the company’s underlying earnings power and execution into year-end. The supportive stance aligns with the quarter’s setup: consensus anticipates revenue of $1.48 billion, adjusted EPS of $2.53, and EBIT of $341.88 million—levels that implicitly assume steady margin discipline after last quarter’s outperformance. Proponents point to the strength of the revenue mix and the recurring contributions from services and sterilization, which together provide a degree of visibility into the near-term profit trajectory. The bullish case emphasizes that Healthcare’s scale can continue to anchor top-line growth while Applied Sterilization Technologies adds incremental operating leverage, allowing the company to navigate normal seasonal and mix-related fluctuations without derailing the anticipated year-over-year growth of 7.17% for revenue and 8.98% for EPS. As a result, positive sentiment currently concentrates on the prospect of an in-line to modestly better quarter and a reaffirmation of operating parameters that support consistent earnings delivery through the remainder of the fiscal year.