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Stericycle Inc SRCL

Rating as of

Morningstar’s Analysis

Valuation
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1-Star Price

PREMIUM

5-Star Price

PREMIUM

Economic Moat

PREMIUM

Capital Allocation

PREMIUM

We’ve Upgraded Stericycle’s Moat Rating To Narrow As Turnaround Efforts Gain Traction

Analyst Note

| Brian Bernard, CFA, CPA |

After taking a fresh look at medical waste leader Stericycle, we've upgraded the firm's moat rating to narrow from none. While we have long believed the firm's core medical waste business was competitively advantaged, poor capital allocation decisions and deficient acquisition integration led to deteriorating financial performance and economic value destruction. Our prior no-moat rating was based on our lack of conviction that Stericycle was more likely than not to earn excess returns over the next decade.

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Company Profile

Business Description

Stericycle is the largest provider of medical waste disposal and data destruction (primarily paper shredding) services in the United States. Its next closest national competitor in the medical waste disposal space is Sharps Compliance, which generated $51 million of sales in 2020 (about 3% of Stericycle's global regulated waste and compliance revenue). Stericycle's data destruction business (Shred-It) is about twice the size of its closest competitor (Iron Mountain's information destruction segment). Stericycle has a global presence, with about 20% of its revenue earned outside North America. Globally, the company has 188 transfer sites, 232 processing facilities, and 7,800 trucks.

Contact
2355 Waukegan Road
Bannockburn, IL, 60015
T +1 847 367-5910
Sector Industrials
Industry Waste Management
Most Recent Earnings Mar 31, 2021
Fiscal Year End Dec 31, 2021
Stock Type Distressed
Employees 15,000

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