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Stericycle Inc SRCL

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Morningstar’s Analysis

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Self-Help Measures Continue to Support Stronger Financial Performance for Stericycle

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.

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Company Profile

Business Description

Stericycle is the largest medical waste management service provider in North America, eclipsing all other competitors in size and scope of its operations. While Stericycle has one publicly traded competitor about 1/60 its size, Sharps Compliance, the industry is dominated by privately owned local companies. Through over 500 acquisitions, Stericycle has been a driving force in the consolidation of the medical waste management industry. Its customers range from physician offices to large hospitals, which cover over 1 million locations. In addition to handling regulated medical waste, Stericycle offers document destruction and call center services. In 2020, Stericycle generated $2.7 billion in revenue of which approximately 80% was generated in the U.S.

2355 Waukegan Road
Bannockburn, IL, 60015
T +1 847 367-5910
Sector Industrials
Industry Waste Management
Most Recent Earnings Dec 31, 2020
Fiscal Year End Dec 31, 2021
Stock Type Distressed
Employees 15,000