What happened

Shares of Stericycle (SRCL 0.29%) fell nearly 24% last month, according to data provided by S&P Global Market Intelligence. There wasn't any company-specific news, but investors hardly needed a nudge toward the exits during a brutal December that saw the S&P 500 lose 7.4% of its value. Stocks considered riskier or overvalued were hit the hardest. Unfortunately for shareholders, Stericycle has earned itself a spot in the former bucket.

The business, which specializes in medical waste disposal and secure information destruction, couldn't find its footing in 2018. Management was forced to revise full-year guidance multiple times as a result. While Stericycle is confident it can reposition itself for long-term success soon, investors have their doubts. Can it turn things around and win back the trust of investors in 2019?

Check out the latest Stericycle earnings call transcript.

A clenched fist on a table next to a tablet displaying a sliding stock chart

Image source: Getty Images.

So what

Winning back trust might take some time. Stericycle turned in a forgettable performance last year, and watched the value of its stock recede 46%. Investor pessimism wasn't misplaced. The performance of the business deteriorated through the first nine months of the year compared to the same period of 2017.

Consider that revenue dropped over 2%, gross profit fell 6.4%, and cash provided by operations sank 77%. Net earnings rose in that span, but that was only due to certain one-time charges taken in 2017. The deterioration appeared to accelerate in the third quarter of 2018 (the last reported quarterly period), with adjusted earnings per share slipping 6.4% year over year.

But perhaps the recently sour performance is just what's needed to reset operations. In November management said the business transformation strategy remained on track. Those efforts were on pace to deliver an additional $60 million to $65 million in adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization), or about 8% of the expected total for the year. Stericycle is also on track to implement a new enterprise resource planning system -- a move that has cost other companies millions of dollars up front, but promises to boost operating efficiency once implemented -- in 2020 and 2021.

Now what

Although the business transformation strategy hit its goals through the first nine months of 2018, it simply hasn't been enough to overcome the slump in the overall business. Nonetheless, Stericycle says it's still on track to grow adjusted EPS in the neighborhood of 8% per year through 2022. To see what's ahead in 2019, investors will need to await the release of fourth-quarter and full-year 2018 operating results.