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Aveanna Healthcare Holdings (AVAH)
NASDAQ:AVAH
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Aveanna Healthcare Holdings
(NASDAQ:AVAH)
44Neutral
Positive Factors
Financial Performance
AVAH reported $45.6m of EBITDA on $505m of revenue, which beat consensus estimates by 22.8% and 2.3%, respectively.
Growth Outlook
Aveanna Healthcare is experiencing above-average volume growth in its core PDS segment, enhancing its long-term growth outlook.
Operational Momentum
Improved state reimbursement and Preferred Payer strategy are driving operational momentum for Aveanna Healthcare Holdings.
Negative Factors
Debt Management
Net leverage is ~1.5x lower than it was just one year ago.
Profitability Challenges
2Q24 marks the first quarter since 2Q22 that EBITDA exceeded interest expense.
Aveanna Healthcare Holdings (AVAH) vs. S&P 500 (SPY)
Market Cap
$738.12M
Dividend YieldN/A
Average Volume (3M)175.53K
Price to Earnings (P/E)―
Beta (1Y)2.09
Revenue Growth6.21%
EPS Growth81.52%
CountryUS
Employees33,500
SectorHealthcare
Sector Strength78
IndustryHealthcare Providers & Services
Share Statistics
EPS (TTM)-0.34
Shares Outstanding193,225,170
10 Day Avg. Volume183,331
30 Day Avg. Volume175,527
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.37
Price to Cash Flow (P/CF)6.30
P/FCF Ratio2.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$5.25Price Target Upside40.37% Upside
Rating ConsensusHold
Number of Analyst Covering1
Aveanna Healthcare Holdings Business Overview & Revenue Model
Company DescriptionAveanna Healthcare Holdings (AVAH) is a leading provider of home healthcare services in the United States. The company operates in sectors including pediatric and adult home care, private duty services, and medical solutions. Aveanna focuses on delivering high-quality clinical services and compassionate care to patients in need of in-home medical assistance, thereby improving the quality of life for both children and adults with chronic or acute health conditions.
How the Company Makes MoneyAveanna Healthcare Holdings generates revenue primarily through the provision of home healthcare services. The company's key revenue streams include pediatric and adult home care services, private duty nursing, and therapy services. Additionally, Aveanna offers medical solutions such as enteral nutrition, respiratory therapy, and other healthcare-related products. Revenue is mainly derived from reimbursements by government programs like Medicaid and Medicare, as well as private insurance providers. Strategic partnerships with hospitals and healthcare facilities also play a significant role in expanding Aveanna's service reach and client base, contributing to its overall earnings.
Aveanna Healthcare Holdings Financial Statement Overview
Summary
Aveanna Healthcare Holdings demonstrates revenue growth but faces significant profitability and leverage challenges. The company struggles with negative equity and high debt levels, raising concerns about financial stability. While there is some positive movement in operational cash flow, the overall financial health is precarious, warranting careful monitoring and strategic interventions.Income Statement
Aveanna Healthcare Holdings shows a consistent increase in revenue, with a notable year-over-year growth of 4.66% (TTM). However, the company has been struggling with profitability, as indicated by a negative net income margin of -3.32% (TTM) and fluctuating EBIT margins. The negative net profit margin highlights underlying profitability issues despite operational revenue growth.45
Neutral
Balance Sheet
The company's balance sheet reflects high leverage with a negative stockholders' equity, resulting in a concerning debt-to-equity ratio. This situation is risky and indicates potential solvency issues. The negative equity ratio further highlights financial instability and challenges in managing liabilities relative to assets.30
Negative
Cash Flow
Aveanna's cash flow statement shows volatility, with a free cash flow growth of -40.44% from the previous year. The operating cash flow to net income ratio remains positive, indicating some efficiency in converting income to cash flow, but the free cash flow to net income ratio suggests ongoing challenges in generating sufficient cash relative to net losses.40
Negative
| Breakdown | |||||
| TTM | Dec 2023 | Dec 2022 | Mar 2022 | Dec 2020 | Dec 2019 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 1.98B | 1.90B | 1.79B | 1.68B | 1.50B | 1.38B |
| Gross Profit | |||||
| 603.24M | 595.43M | 553.23M | 542.40M | 454.51M | 419.25M |
| EBIT | |||||
| 131.70M | 8.07M | 26.30M | 95.97M | 81.95M | 38.95M |
| EBITDA | |||||
| 120.82M | 44.35M | -517.28M | -9.26M | 22.13M | 44.28M |
| Net Income Common Stockholders | |||||
| -65.84M | -134.52M | -662.03M | -117.04M | -57.05M | -76.52M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 30.49M | 43.94M | 19.22M | 30.49M | 137.34M | 3.33M |
| Total Assets | |||||
| 2.33B | 1.61B | 1.71B | 2.33B | 1.84B | 1.58B |
| Total Debt | |||||
| 1.30B | 1.50B | 1.36B | 1.30B | 1.23B | 1.08B |
| Net Debt | |||||
| 1.27B | 1.46B | 1.34B | 1.27B | 1.09B | 1.08B |
| Total Liabilities | |||||
| 1.70B | 1.74B | 1.72B | 1.70B | 1.58B | 1.31B |
| Stockholders Equity | |||||
| 637.95M | -127.44M | -4.17M | 637.95M | 267.17M | 270.94M |
| Cash Flow | Free Cash Flow | ||||
| 9.87M | 16.56M | -60.41M | -27.30M | 101.38M | -25.35M |
| Operating Cash Flow | |||||
| 16.23M | 22.67M | -48.40M | -11.35M | 116.62M | -8.71M |
| Investing Cash Flow | |||||
| -6.36M | -8.79M | -25.29M | -681.83M | -193.54M | -17.82M |
| Financing Cash Flow | |||||
| 20.30M | 10.85M | 62.42M | 586.33M | 210.94M | 21.86M |
Aveanna Healthcare Holdings Technical Analysis
Negative
3.74
Price Trends
4.53
Negative
4.88
Negative
4.47
Negative
Market Momentum
-0.26
Positive
35.29
Neutral
10.42
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AVAH, the sentiment is Negative. The current price of 3.74 is below the 20-day moving average (MA) of 4.27, below the 50-day MA of 4.53, and below the 200-day MA of 4.47, indicating a bearish trend. The MACD of -0.26 indicates Positive momentum. The RSI at 35.29 is Neutral, neither overbought nor oversold. The STOCH value of 10.42 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for AVAH.
Aveanna Healthcare Holdings Risk Analysis
Aveanna Healthcare Holdings disclosed 53 risk factors in its most recent earnings report. Aveanna Healthcare Holdings reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Aveanna Healthcare Holdings Peers Comparison
Overall Rating
UnderperformOutperform
Sector (49)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
73 Outperform | $82.76B | 15.01 | -230.22% | 0.81% | 8.67% | 15.32% | |
72 Outperform | $9.77B | 22.23 | 24.52% | 0.65% | 11.91% | 28.47% | |
66 Neutral | $3.02B | 70.72 | 3.93% | ― | 5.01% | ― | |
66 Neutral | $2.19B | 10.50 | 13.35% | 2.87% | -0.63% | -13.10% | |
64 Neutral | $1.72B | 22.37 | 8.78% | ― | 9.06% | 10.68% | |
49 Neutral | $6.90B | 0.01 | -53.76% | 2.46% | 24.91% | -3.11% | |
44 Neutral | $738.12M | ― | 42.49% | ― | 6.21% | 81.52% |
* Healthcare Sector Average
Performance Comparison
AVAH
Aveanna Healthcare Holdings
3.74
1.24
49.60%
ADUS
Addus Homecare
93.09
-6.01
-6.06%
AMED
Amedisys
92.12
-1.13
-1.21%
HCA
HCA Healthcare
312.87
-6.53
-2.04%
EHC
Encompass Health
94.28
18.71
24.76%
SEM
Select Medical
16.79
1.61
10.61%
Aveanna Healthcare Holdings Earnings Call Summary
Earnings Call Date: Nov 7, 2024 | % Change Since: -22.25% | Next Earnings Date: Mar 13, 2025
Earnings Call Sentiment Positive
The earnings call highlighted significant revenue and EBITDA growth, successful preferred payer agreements, and improvements in segments like Private Duty Services and Medical Solutions. However, challenges remain with labor market constraints and rate increases in California. The impact of recent hurricanes also posed operational disruptions. The positive financial metrics and strategic progress outweigh these challenges.Highlights
Revenue Growth
Revenue for the third quarter was approximately $509 million, representing a 6.5% increase over the prior year period.
Adjusted EBITDA Increase
Third quarter adjusted EBITDA was $47.8 million, representing a 32.2% increase over the prior year period.
Preferred Payer Agreements
Year-to-date, Aveanna added 7 additional preferred payer agreements, increasing their total to 21, with a goal to exceed 22 by year-end.
Private Duty Services Growth
Revenue increased by 6.4% with approximately 10.5 million hours of care, a volume increase of 3.8% over the prior year.
Home Health & Hospice Segment Improvement
Gross margins improved to 53.9%, up 6% from the prior year period.
Medical Solutions Segment Performance
Revenue of $45.3 million, a 12.6% increase over the prior year, and gross margins were approximately $20.7 million or 45.6% for the quarter.
Free Cash Flow
Cash provided by operating activities was $19.2 million, and free cash flow was approximately $17 million for the quarter.
Lowlights
Labor Market Challenges
The company continues to face challenges due to the shortage of available caregivers, constraining top-line growth.
California Rate Increase Challenges
Aveanna faces difficulties securing appropriate PDN rate increases in California due to anticipated budget deficits.
Impact of Hurricanes
There was a disruption in operations at the end of September and the first two weeks of October due to hurricanes affecting business in Florida, Carolinas, and Georgia.
Company Guidance
During the Aveanna Healthcare Holdings Q3 2024 earnings call, the executive team provided revised guidance for the full year. They anticipate full-year revenue to reach approximately $2 billion, with adjusted EBITDA exceeding $168 million. This outlook reflects a strategic focus on enhancing partnerships with government and preferred payers, resulting in a Q3 revenue increase of 6.5% year-over-year to $509 million, and a 32.2% rise in adjusted EBITDA to $47.8 million. Key metrics highlighted include a 6.4% revenue growth in the Private Duty Services segment and a 12.6% increase in the Medical Solutions segment. The company also reported a gross margin of 31.4% and noted improvements in the labor market and caregiver hiring trends. The guidance underscores Aveanna's commitment to leveraging strategic initiatives, including preferred payer agreements, which accounted for 47% of their Private Duty Services MCO volumes in Q3.Aveanna Healthcare Holdings Corporate Events
Business Operations and StrategyFinancial Disclosures
Aveanna Highlights Growth Strategy and Financial Updates
Neutral
Nov 8, 2024
Aveanna Healthcare Holdings Inc. recently shared a financial presentation, highlighting its strategic use of their website and social media for distributing critical company updates. Investors are encouraged to visit Aveanna’s website for timely information, including financial reports and presentations. The presentation cautions about forward-looking statements and underscores the firm’s growth strategy, competitive market positioning, and financial metrics like Adjusted EBITDA and revenue growth. Despite uncertainties and risks, Aveanna remains focused on expanding its national footprint and optimizing its operations.
Business Operations and StrategyFinancial Disclosures
Aveanna Healthcare Sees Revenue Growth Despite Net Loss
Neutral
Nov 7, 2024
Aveanna Healthcare Holdings reported robust financial growth for Q3 2024, with revenue reaching $509 million, a 6.5% increase from the previous year. The company’s strategic focus on cost reduction and partnerships led to a significant 32.2% rise in adjusted EBITDA, amounting to $47.8 million. Despite a net loss of $42.8 million, Aveanna has raised its full-year 2024 revenue guidance to $2 billion, highlighting their success in enhancing profitability and clinical outcomes.
Executive/Board Changes
Aveanna Healthcare Appoints Brent Layton to Board
Positive
Nov 4, 2024
Aveanna Healthcare Holdings Inc. has appointed Brent Layton as a Class III director and member of the Audit Committee. Layton, who is currently the CEO of Sharecare, brings over two decades of experience from his previous roles at Centene Corporation. His extensive expertise in healthcare policy and managed care is expected to be a significant asset to Aveanna as it continues to expand its strategic plans. Layton expressed enthusiasm for joining the board and contributing to Aveanna’s mission of delivering value-based care at home.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.