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Stericycle Inc SRCL

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Morningstar’s Analysis

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5-Star Price

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Economic Moat

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Capital Allocation

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Stericycle Sees a Nice Q2 Sales Rebound as Its End Markets Strengthen; Margin Improvement Continues

Analyst Note

| Brian Bernard, CFA, CPA |

We're maintaining our $59 per share fair value estimate for Stericycle following its second-quarter earnings release that largely met our expectations. As we anticipated, top-line growth returned as its end markets recover, and adjusted operating margin improved compared with the year-ago quarter. Total revenue increased 12.5% year over year (14.4% organic) to $673 million, adjusted operating margin expanded 140 basis points to 15.7%, and adjusted EPS of $0.67 was 46% above the prior-year quarter.

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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 Jun 30, 2021
Fiscal Year End Dec 31, 2021
Stock Type Slow Growth
Employees 7,000

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