Critical Review: Sotera Health (NASDAQ:SHC) & Rapid Micro Biosystems (NASDAQ:RPID)

Sotera Health (NASDAQ:SHC) and Rapid Micro Biosystems (NASDAQ:RPID) are both healthcare companies, but which is the better investment? We will contrast the two companies based on the strength of their earnings, valuation, profitability, institutional ownership, analyst recommendations, dividends and risk.

Insider & Institutional Ownership

91.0% of Sotera Health shares are owned by institutional investors. Comparatively, 52.6% of Rapid Micro Biosystems shares are owned by institutional investors. 15.4% of Sotera Health shares are owned by insiders. Comparatively, 12.7% of Rapid Micro Biosystems shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Valuation & Earnings

This table compares Sotera Health and Rapid Micro Biosystems”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Sotera Health	$1.22 billion	3.85	$77.94 million	$0.57	28.81
Rapid Micro Biosystems	$35.18 million	0.99	-$47.12 million	($1.12)	-0.62

Sotera Health has higher revenue and earnings than Rapid Micro Biosystems. Rapid Micro Biosystems is trading at a lower price-to-earnings ratio than Sotera Health, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a summary of current ratings for Sotera Health and Rapid Micro Biosystems, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Sotera Health	1	2	8	0	2.64
Rapid Micro Biosystems	1	0	2	1	2.75

Sotera Health currently has a consensus target price of $21.38, indicating a potential upside of 30.17%. Rapid Micro Biosystems has a consensus target price of $5.00, indicating a potential upside of 623.59%. Given Rapid Micro Biosystems’ stronger consensus rating and higher possible upside, analysts plainly believe Rapid Micro Biosystems is more favorable than Sotera Health.

Volatility and Risk

Sotera Health has a beta of 1.85, meaning that its stock price is 85% more volatile than the S&P 500. Comparatively, Rapid Micro Biosystems has a beta of 1.5, meaning that its stock price is 50% more volatile than the S&P 500.

Profitability

This table compares Sotera Health and Rapid Micro Biosystems’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Sotera Health	13.44%	40.12%	7.55%
Rapid Micro Biosystems	-145.56%	-177.04%	-73.12%

Summary

Sotera Health beats Rapid Micro Biosystems on 12 of the 15 factors compared between the two stocks.

About Sotera Health

Sotera Health Company engages in the provision of sterilization, lab testing, and advisory services in the United States and internationally. The company operates through three segments: Sterigenics, Nordion, and Nelson Labs. It provides mission-critical end-to-end sterilization services, including gamma and electron beam irradiation, and ethylene oxide processing, as well as designs, installs, and maintains gamma irradiation systems. The company also provides microbiological and analytical chemistry testing, as well as technical assistance, regulatory consulting, and advisory services. It serves medical devices, pharmaceuticals, food safety, agricultural products, cancer treatment, and high-performance materials industries, as well as commercial, advanced, and specialty application industries. The company was formerly known as Sotera Health Topco, Inc. and changed its name to Sotera Health Company in October 2020. Sotera Health Company was incorporated in 2015 and is headquartered in Broadview Heights, Ohio.

About Rapid Micro Biosystems

Rapid Micro Biosystems, Inc., a life sciences technology company, provides products for the detection of microbial contamination in the manufacture of pharmaceutical, medical devices, and personal care products in the United States, Germany, Switzerland, Japan, and internationally. The company offers Growth Direct platform, which includes Growth Direct system, proprietary consumables, lab information management system connection software, and customer support and validation services. Its platform automates and modernizes the manual microbial quality control (MQC) testing workflows for therapeutic modalities, such as biologics, vaccines, cell and gene therapies, and sterile injectables. The company also provides onsite technical training services. Its solutions are used in environmental monitoring, water, bioburden, and sterility release testing applications. In addition, the company offers RMBNucleus software for the Growth Direct system; RMBNucleus Mold Alarm signals at the first sign of mold detection; RMBNucleus Central Manager portal streamlines coordination of multiple instruments; and Growth Direct LIMS connection software. Rapid Micro Biosystems, Inc. was formerly known as Genomic Profiling Systems, Inc. and changed its name to Rapid Micro Biosystems, Inc. in January 2007. The company was incorporated in 2006 and is headquartered in Lowell, Massachusetts.