Stericycle Earnings: Contract Pricing Levers and Stabilizing Costs Drive Strong Margin Performance

Stericycle delivered strong first-quarter results as contract pricing levers prompted better-than-expected organic growth and provided a boost to gross margin. Revenue of $684 million and adjusted EPS of $0.49 outpaced FactSet consensus by 2% and 11%, respectively. Management reiterated its full-year guidance for 3%-5% organic revenue growth and adjusted EPS in the range of $1.75-$2.05. Shares jumped by high-single digits on April 27 as a result. We are encouraged by Stericycle’s solid profit performance in the first quarter as operational efficiencies and contract negotiations continue to materialize. We've maintained our $59 per share fair value estimate because our long-term outlook remains intact.