Zacks Research Lowers Earnings Forecast for Avanos Medical

Analysts at Zacks Research have revised their earnings estimates for Avanos Medical, Inc. (NYSE: AVNS), projecting a decrease for the fiscal year 2025. In a report released on November 26, 2023, Zacks analysts now expect the company to report earnings per share of $0.89, down from a previous estimate of $0.92. The firm maintains a “Hold” rating on the stock, which currently has a consensus estimate for full-year earnings of $1.32 per share.

For the upcoming quarters, Zacks Research has provided further earnings predictions: $0.24 for Q4 2025, $0.23 for Q1 2026, $0.22 for Q2 2026, $0.27 for Q3 2026, and $0.36 for Q4 2026. The overall forecast for FY2026 is set at $1.08 EPS, while FY2027 earnings are expected to reach $1.24.

Recent Earnings Report Highlights

Avanos Medical reported its most recent earnings results on November 5, 2023, revealing earnings per share of $0.22 for the quarter. This figure exceeded analysts’ consensus estimates, which predicted earnings of only $0.12, marking a significant beat of $0.10. The company generated revenues of $177.8 million, surpassing analyst expectations of $164.5 million. Despite this positive revenue growth of 4.3% compared to the same quarter last year, Avanos reported a negative net margin of 67.0% alongside a positive return on equity of 6.21%.

Market Performance and Analyst Ratings

On the market front, Avanos Medical’s stock opened at $11.74 on Monday, with a market capitalization of approximately $544.97 million. The company has a price-to-earnings ratio of -1.15 and a beta of 1.09. Over the last 52 weeks, shares have fluctuated between a low of $9.30 and a high of $19.91.

Following Zacks’ report, several other research firms have provided their ratings on Avanos Medical. Weiss Ratings reiterated a “sell (d)” rating on the stock on November 25, 2023, while Wall Street Zen upgraded Avanos from a “buy” to a “strong-buy” rating on November 8, 2023. Currently, one investment analyst has assigned a Hold rating, while another has issued a Sell rating. According to data from MarketBeat.com, the stock has an average rating of “Reduce.”

In insider trading news, Kerr Holbrook, Senior Vice President, sold 15,000 shares on November 18, 2023, at an average price of $11.00, totaling $165,000. Post-transaction, Holbrook holds 83,860 shares valued at approximately $922,460. Company insiders currently own 2.64% of Avanos Medical’s stock.

Recent movements among institutional investors indicate a growing interest in Avanos Medical. Armistice Capital LLC acquired a new stake valued at around $28.66 million. Additionally, T. Rowe Price Investment Management Inc. increased its stake by 24.8% in the first quarter, now holding 3,757,576 shares worth about $53.85 million. Other significant increases in holdings include Millennium Management LLC, which boosted its stake by 312.4% in the third quarter, and Ameriprise Financial Inc., which grew its stake by 356.6%.

Overall, institutional and hedge fund investors control approximately 95.17% of Avanos Medical’s shares, indicating a strong institutional backing for the company as it navigates the challenges ahead.

Avanos Medical, Inc. specializes in medical technology, offering a diverse portfolio of medical device solutions across multiple regions, including North America, Europe, the Middle East, Africa, Asia Pacific, and Latin America. The company provides chronic care products, particularly in digestive health.