Is Sotera Health Co. overvalued or undervalued?

As of 27 February 2025, Sotera Health Co. has moved from an attractive to an expensive valuation grade. The company is currently overvalued, with a P/E ratio of 36, significantly higher than the industry average P/E of approximately 14.54 for Lantheus Holdings, Inc., which is considered attractive. Additionally, Sotera's EV to EBITDA stands at 10.60, while its peer Lantheus has a lower ratio of 9.83, further indicating a premium valuation.
In terms of performance metrics, Sotera Health Co. has a ROE of 23.53% and a ROCE of 14.97%, which are respectable figures but do not justify the high valuation given the current market conditions. The company's recent stock performance has lagged behind the S&P 500, with a year-to-date decline of 18.93% compared to a 2.44% gain in the index, reinforcing the notion that the stock may be overpriced relative to its peers and overall market performance.