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Avanos Medical (AVNS)
NYSE:AVNS
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Avanos Medical
(NYSE:AVNS)
52Neutral
Positive Factors
Business Strategy
AVNS recorded some positive developments during the quarter, which include completing the divestiture of its respiratory health business, exceeding internal expectations on its Trident U.S. market launch, as well as improving its capital position.
Financial Performance
Avanos Medical posted a moderate quarterly beat on both the top and bottom lines, with a strong quarter from its Digestive Health business.
Leadership
The appointment of interim CEO Michael Greiner is seen as a positive step in the company's transformation process.
Negative Factors
Market Expectations
Management's initial full-year 2025 guidance was light of Street expectations, calling for flat to slight declines in both revenue and earnings, reflecting a challenging market environment for some of its product categories, currency headwinds, and other macro factors.
Pricing Pressures
The hyaluronic acid injection business continues to be a sore spot with ongoing pricing pressures highlighted as a key factor underpinning the company’s below-Consensus initial 2025 guidance.
Product Performance
Total sales were light of Street expectations due to disruption within its On-Q and COOLIEF businesses.
Avanos Medical (AVNS) vs. S&P 500 (SPY)
Market Cap
$660.15M
Dividend YieldN/A
Average Volume (3M)531.78K
Price to Earnings (P/E)45.8
Beta (1Y)1.34
Revenue Growth-2.54%
EPS Growth-546.91%
CountryUS
Employees2,227
SectorHealthcare
Sector Strength78
IndustryMedical - Devices
Share Statistics
EPS (TTM)-8.53
Shares Outstanding46,003,150
10 Day Avg. Volume536,678
30 Day Avg. Volume531,785
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.98
Price to Cash Flow (P/CF)2.90
P/FCF Ratio2.90
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$17.00Price Target Upside21.17% Upside
Rating ConsensusHold
Number of Analyst Covering2
Avanos Medical Business Overview & Revenue Model
Company DescriptionAvanos Medical, Inc. is a medical technology company that focuses on delivering clinically superior products and improving patient outcomes. Headquartered in Alpharetta, Georgia, Avanos operates in the healthcare sector, specializing in the development of advanced medical devices. The company's core products and services include offerings in pain management and chronic care, such as its innovative non-opioid solutions for acute and chronic pain, and its portfolio of enteral feeding products designed to improve patient care and comfort.
How the Company Makes MoneyAvanos Medical generates revenue primarily through the sale of its medical devices and solutions, which are aimed at healthcare facilities, hospitals, and other medical institutions. The company's revenue model is centered around two key segments: Pain Management and Chronic Care. The Pain Management segment focuses on providing non-opioid pain relief solutions, which are increasingly in demand as healthcare providers seek alternatives to opioid prescriptions. The Chronic Care segment includes products designed for enteral feeding, airway management, and other chronic care needs. Additionally, Avanos may engage in strategic partnerships and collaborations that enable it to expand its product offerings and market reach, contributing to its financial performance. Factors such as regulatory approvals, market demand for non-opioid pain management, and the adoption of chronic care solutions are significant contributors to Avanos Medical's earnings.
Avanos Medical Financial Statement Overview
Summary
Avanos Medical exhibits a mix of growth and challenges. While revenue shows modest growth, profitability metrics remain weak with consistent net losses. The balance sheet holds a stable equity position, mitigating some risk. Cash flow improvements are a positive sign, but underlying profitability and operational efficiency need attention to ensure long-term financial health.Income Statement
Avanos Medical has shown a slight increase in revenue with a 2.15% growth from 2023 to 2024, but there are significant concerns with profitability. The company reported a substantial net loss of $392.1 million in 2024, leading to a negative net profit margin. The negative EBIT and EBITDA margins indicate operational challenges, suggesting inefficiency in managing operational costs.42
Neutral
Balance Sheet
The balance sheet reflects a reasonable level of equity with a debt-to-equity ratio of 0.21 in 2024, showcasing a manageable leverage level. However, the decline in stockholders' equity and total assets over recent years signals a potential risk in financial stability. The equity ratio remains stable at around 71.8%, indicating a strong asset base supported by equity.55
Neutral
Cash Flow
The cash flow situation shows improvement with a significant increase in free cash flow from 2023 to 2024. The free cash flow to net income ratio is positive, suggesting positive cash generation despite accounting losses. However, the operating cash flow to net income ratio is concerning due to negative net income, indicating reliance on non-operational cash sources.60
Neutral
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 687.80M | 673.30M | 820.00M | 744.60M | 714.80M | Gross Profit |
| 381.30M | 379.70M | 450.00M | 364.30M | 373.30M | EBIT |
| -396.20M | 4.20M | 74.00M | 8.90M | -46.10M | EBITDA |
| -345.60M | 50.60M | 77.80M | 8.90M | -2.00M | Net Income Common Stockholders |
| -392.10M | -61.80M | 50.50M | 6.30M | -27.20M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 107.70M | 87.70M | 127.70M | 118.50M | 111.50M | Total Assets |
| 1.15B | 1.69B | 1.79B | 1.59B | 1.67B | Total Debt |
| 170.20M | 209.10M | 280.00M | 187.50M | 248.80M | Net Debt |
| 62.50M | 121.40M | 152.30M | 69.00M | 137.30M | Total Liabilities |
| 325.70M | 456.10M | 495.70M | 330.70M | 416.30M | Stockholders Equity |
| 828.50M | 1.24B | 1.29B | 1.26B | 1.26B |
| Cash Flow | Free Cash Flow | |||
| 82.90M | 14.60M | 71.60M | 66.30M | -22.70M | Operating Cash Flow |
| 100.70M | 32.40M | 90.90M | 87.30M | -2.50M | Investing Cash Flow |
| -27.50M | 21.60M | -135.40M | -21.00M | -24.20M | Financing Cash Flow |
| -49.10M | -94.20M | 56.70M | -55.30M | -70.00M |
Avanos Medical Technical Analysis
Negative
14.03
Price Trends
15.50
Negative
16.52
Negative
19.42
Negative
Market Momentum
-0.37
Negative
40.05
Neutral
30.63
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AVNS, the sentiment is Negative. The current price of 14.03 is below the 20-day moving average (MA) of 14.51, below the 50-day MA of 15.50, and below the 200-day MA of 19.42, indicating a bearish trend. The MACD of -0.37 indicates Negative momentum. The RSI at 40.05 is Neutral, neither overbought nor oversold. The STOCH value of 30.63 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for AVNS.
Avanos Medical Risk Analysis
Avanos Medical disclosed 37 risk factors in its most recent earnings report. Avanos Medical 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
Avanos Medical Peers Comparison
Overall Rating
UnderperformOutperform
Sector (48)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
77 Outperform | $112.72B | 26.71 | 8.42% | 3.19% | 2.72% | 4.48% | |
76 Outperform | $63.63B | 36.81 | 6.92% | 1.80% | 5.89% | 42.05% | |
73 Outperform | $22.43B | 25.42 | 7.24% | 0.85% | 3.84% | -9.29% | |
67 Neutral | $13.84B | 19.52 | 15.78% | ― | 1.75% | 50.25% | |
54 Neutral | $16.08B | 136.07 | -9.24% | 2.93% | -14.00% | -184.82% | |
52 Neutral | $660.15M | 45.80 | -37.42% | ― | -2.54% | -546.91% | |
48 Neutral | $6.86B | 1.11 | -50.22% | 2.47% | 16.71% | 1.53% |
* Healthcare Sector Average
Performance Comparison
AVNS
Avanos Medical
14.03
-5.47
-28.05%
BAX
Baxter International
28.79
-12.72
-30.64%
BDX
Becton Dickinson
207.34
-34.60
-14.30%
HOLX
Hologic
61.69
-16.29
-20.89%
MDT
Medtronic
87.89
6.09
7.44%
ZBH
Zimmer Biomet Holdings
112.66
-13.55
-10.74%
Avanos Medical Earnings Call Summary
Earnings Call Date: Feb 26, 2025 | % Change Since: -9.83% | Next Earnings Date: Apr 30, 2025
Earnings Call Sentiment Neutral
The earnings call presented a mixed sentiment. The company achieved strong performance in its enteral feeding portfolio and improved its financial position significantly. However, these positive outcomes were offset by a substantial non-cash impairment charge and challenges in the pain management and recovery portfolio. Additionally, the outlook for 2025 indicates a pause in margin improvement and flat sales expectations.Highlights
Strong Fourth Quarter Performance
Sales from continuing operations during the fourth quarter were approximately $180 million, with organic sales up 5% compared to a year ago. Adjusted diluted earnings per share were $0.43, and adjusted EBITDA from continuing operations was nearly $29 million.
Enteral Feeding Portfolio Growth
The enteral feeding portfolio grew almost 12% organically versus the prior year, reaffirming its number one position in short-term, long-term, and neonatal feeding.
Improved Financial Position and Liquidity
The company improved its financial position with $108 million of cash on hand and $135 million of debt outstanding by the end of the year, and generated $83 million of free cash flow, an increase of almost $70 million compared to the previous year.
Successful Transformation Initiatives
The company completed the divestiture of its respiratory health business and exited the deferred prosecution agreement with the DOJ, marking significant milestones in its three-year transformation process.
Lowlights
Non-Cash Impairment Charge
The company's fourth quarter GAAP results included a non-cash impairment charge of approximately $437 million due to the fair value of its single company reporting unit being below its carrying value.
Pain Management and Recovery Portfolio Challenges
Normalized organic sales for the pain management and recovery portfolio were down approximately 3% in the fourth quarter, with pricing pressure in the three-shot offering presenting ongoing challenges.
Flat Sales and Margin Expectations for 2025
The company expects net sales in the range of $665 million to $685 million for 2025, with flat to low single-digit organic growth in its Pain Management and Recovery segment, and a 20% decline in its Corporate and Other segment.
Company Guidance
During the fourth quarter of 2024, Avanos Medical, Inc. reported sales from continuing operations of approximately $180 million, an organic sales increase of 5% year-over-year, and adjusted diluted earnings per share of $0.43. The company achieved an adjusted EBITDA of nearly $29 million, with adjusted gross margins close to 59% and SG&A expenses accounting for 41.6% of revenue. For the full year, sales from continuing operations totaled around $688 million, marking a 3.3% organic sales increase, and adjusted diluted earnings per share rose by 31% to $1.35. The adjusted EBITDA reached approximately $108 million, and free cash flow generation was $83 million, significantly up from the previous year. The guidance for 2025 forecasts net sales between $665 million and $685 million, with the Specialty Nutrition Systems segment expected to grow mid-single digits and the Pain Management and Recovery segment anticipated to achieve flat to low single-digit growth. Adjusted diluted earnings per share are projected to range from $1.05 to $1.25, with an effective tax rate of about 27%.Avanos Medical Corporate Events
Executive/Board ChangesBusiness Operations and Strategy
Avanos Medical Appoints David Pacitti as New CEO
Positive
Mar 17, 2025
On March 17, 2025, Avanos Medical announced the appointment of David Pacitti as its new Chief Executive Officer, effective April 14, 2025. Pacitti, who previously held leadership roles at Siemens Healthineers and Abbott Vascular, brings extensive industry expertise and a strategic vision to the company. His appointment is expected to drive Avanos’s next phase of growth and success, with a focus on delivering breakthrough medical device solutions and enhancing long-term value for stakeholders.
Business Operations and Strategy
Avanos Medical Highlights Strategic Transformation Initiatives
Positive
Jan 13, 2025
Avanos Medical announced its participation in the 43rd Annual JP Morgan Healthcare Conference, highlighting strategic transformation initiatives aimed at optimizing their product portfolio and enhancing profitability. The company is focusing on market expansion through innovation, restructuring sales organizations, and cost management initiatives to drive growth and deliver value to stakeholders.
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.