Analyst Note| Brian Bernard, CFA, CPA |
While Stericycle continues to be adversely affected by the pandemic, we were encouraged by the no-moat-rated firm's fourth-quarter results. Excluding financial results from divested businesses, consolidated organic revenue decreased about 2% year over year to $656 million. Stericycle's regulated waste and compliance services business recorded its second consecutive quarter of growth, as organic revenue increased over 3% year over year (compared with a 1% increase during the third quarter). The secure information destruction services business continues to face significant headwinds, but year-over-year organic revenue declines continue to ease. We expect consolidated revenue growth will turn positive in 2021 as Stericycle's end markets begin to normalize (for example, more elective medical procedures and increased office occupancy) and the company's internal sales-focused initiatives bear fruit.