Steris Earnings: Strong End to Fiscal 2025, Robust Guidance for Fiscal 2026

Narrow-moat Steris issued fourth-quarter results and fiscal 2026 guidance that modestly beat our expectations. Constant-currency organic revenue growth was 6% year over year and gross profit margins increased 170 basis points over the prior year, driven by positive contributions from pricing, product mix, and productivity gains. The company provided fiscal 2026 guidance of 6%-7% revenue growth for each segment and 7%-10% growth in earnings. This guidance includes an estimated impact of $30 million from current tariffs, or 55 basis points of fiscal 2025's revenue, which is milder than our expectation. We maintain our fair value estimate of $231 and think the shares are starting to climb into overvalued territory after strong year-to-date price performance.