We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Three Reasons to Retain Avanos (AVNS) Stock in Your Portfolio
Read MoreHide Full Article
Avanos Medical, Inc. (AVNS - Free Report) is well-poised for growth in the coming quarters, courtesy of its impressive product line. The optimism led by a solid first-quarter 2024 performance and continued focus on its research and development (R&D) are expected to contribute further. However, stiff competition and macroeconomic concerns persist.
In the year-to-date period, this Zacks Rank #3 (Hold) stock has gained 17.2% compared with the 2.4% rise of the industry and 9.5% growth of the S&P 500 Composite.
The renowned medical device solutions provider has a market capitalization of $1.04 billion. Avanos’ earnings yield of 6.1% compares favorably against the industry’s negative yield.
Image Source: Zacks Investment Research
Let’s delve deeper.
Product Portfolio: Avanos’ robust product suite raises our optimism. Digestive Health is a portfolio of products that includes its MIC-KEY enteral feeding tubes, Corpak patient feeding solutions and NeoMed neonatal and pediatric feeding solutions. Pain Management and Recovery is a portfolio of non-opioid pain solutions, including Surgical pain and recovery products and Interventional pain solutions.
In the first quarter, Digestive Health’s net revenues improved 6.6% year over year. The growth was driven primarily by NeoMed neonatal and pediatric feeding solutions. Pain Management and Recovery’s net revenues increased 1.3% year over year on a reported basis. The segment’s revenues were driven by overall favorable volume, partially offset by unfavorable pricing impact.
Focus on R&D: We are upbeat about Avanos' continued focus on its research and development division to bring new products to market and improve the efficiency, dependability, and security of its existing offerings. The company holds numerous patents and has numerous patent applications pending in the United States and other nations that are related to the technology utilized in many of the company's products.
Strong Q1 Results: Avanos ended the first quarter of 2024 with a decent revenue uptick along with better-than-expected bottom-line growth. Its continued strength in the Digestive Health segment in the quarter was encouraging. The recovery in the Pain Management and Recovery segment was promising as well.
Downsides
Macroeconomic Concerns: Avanos is facing macroeconomic challenges, notably inflationary pressures arising from global supply chain disruptions, workforce shortages, and pervasive economic causes. Avanos' financial situation has been impacted by these circumstances, which have increased manufacturing and operational costs. It is anticipated that these pressures will continue in the future. The uncertainty surrounding the company's ability to offset these expenses through pricing adjustments puts its profitability and gross margins at risk.
Competition: Avanos faces significant competition in both the United States and international markets. Competitors of the company’s products are fragmented by particular product categories, and the individual markets are extremely competitive for these products. This intense competitive landscape is expected to put pressure on margins.
Estimate Trend
Avanos is witnessing a stable estimate revision trend for 2024. In the past 90 days, the Zacks Consensus Estimate for its earnings has been stable at $1.38 per share.
The Zacks Consensus Estimate for the company’s second-quarter 2024 revenues is pegged at $171.1 million, indicating a 1% improvement from the year-ago quarter’s reported number.
Key Picks
Some better-ranked stocks in the broader medical space that have announced quarterly results are Boston Scientific Corporation (BSX - Free Report) , Hologic (HOLX - Free Report) and Universal Health Services (UHS - Free Report) .
Boston Scientific reported first-quarter 2024 adjusted earnings per share of 56 cents, which beat the Zacks Consensus Estimate by 9.8%. Revenues of $3.86 billion surpassed the Zacks Consensus Estimate by 4.9%. It currently carries a Zacks Rank of 2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Boston Scientific has a long-term estimated growth rate of 12.5%. BSX’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 7.5%.
Hologic, carrying a Zacks Rank of 2 at present, has an estimated long-term growth rate of 7.4%. Its earnings surpassed estimates in each of the trailing four quarters, delivering an average surprise of 4.94%.
Hologic’s shares have risen 0.3% year to date compared with the industry’s 4.7% growth.
Universal Health Services has an Earnings ESP of +2.91% and a Zacks Rank of 2 at present. UHS has an estimated earnings growth rate of 30.5% for 2024.
UHS’ earnings surpassed estimates in each of the trailing four quarters, delivering an average surprise of 8.12%.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Three Reasons to Retain Avanos (AVNS) Stock in Your Portfolio
Avanos Medical, Inc. (AVNS - Free Report) is well-poised for growth in the coming quarters, courtesy of its impressive product line. The optimism led by a solid first-quarter 2024 performance and continued focus on its research and development (R&D) are expected to contribute further. However, stiff competition and macroeconomic concerns persist.
In the year-to-date period, this Zacks Rank #3 (Hold) stock has gained 17.2% compared with the 2.4% rise of the industry and 9.5% growth of the S&P 500 Composite.
The renowned medical device solutions provider has a market capitalization of $1.04 billion. Avanos’ earnings yield of 6.1% compares favorably against the industry’s negative yield.
Image Source: Zacks Investment Research
Let’s delve deeper.
Product Portfolio: Avanos’ robust product suite raises our optimism. Digestive Health is a portfolio of products that includes its MIC-KEY enteral feeding tubes, Corpak patient feeding solutions and NeoMed neonatal and pediatric feeding solutions. Pain Management and Recovery is a portfolio of non-opioid pain solutions, including Surgical pain and recovery products and Interventional pain solutions.
In the first quarter, Digestive Health’s net revenues improved 6.6% year over year. The growth was driven primarily by NeoMed neonatal and pediatric feeding solutions. Pain Management and Recovery’s net revenues increased 1.3% year over year on a reported basis. The segment’s revenues were driven by overall favorable volume, partially offset by unfavorable pricing impact.
Focus on R&D: We are upbeat about Avanos' continued focus on its research and development division to bring new products to market and improve the efficiency, dependability, and security of its existing offerings. The company holds numerous patents and has numerous patent applications pending in the United States and other nations that are related to the technology utilized in many of the company's products.
Strong Q1 Results: Avanos ended the first quarter of 2024 with a decent revenue uptick along with better-than-expected bottom-line growth. Its continued strength in the Digestive Health segment in the quarter was encouraging. The recovery in the Pain Management and Recovery segment was promising as well.
Downsides
Macroeconomic Concerns: Avanos is facing macroeconomic challenges, notably inflationary pressures arising from global supply chain disruptions, workforce shortages, and pervasive economic causes. Avanos' financial situation has been impacted by these circumstances, which have increased manufacturing and operational costs. It is anticipated that these pressures will continue in the future. The uncertainty surrounding the company's ability to offset these expenses through pricing adjustments puts its profitability and gross margins at risk.
Competition: Avanos faces significant competition in both the United States and international markets. Competitors of the company’s products are fragmented by particular product categories, and the individual markets are extremely competitive for these products. This intense competitive landscape is expected to put pressure on margins.
Estimate Trend
Avanos is witnessing a stable estimate revision trend for 2024. In the past 90 days, the Zacks Consensus Estimate for its earnings has been stable at $1.38 per share.
The Zacks Consensus Estimate for the company’s second-quarter 2024 revenues is pegged at $171.1 million, indicating a 1% improvement from the year-ago quarter’s reported number.
Key Picks
Some better-ranked stocks in the broader medical space that have announced quarterly results are Boston Scientific Corporation (BSX - Free Report) , Hologic (HOLX - Free Report) and Universal Health Services (UHS - Free Report) .
Boston Scientific reported first-quarter 2024 adjusted earnings per share of 56 cents, which beat the Zacks Consensus Estimate by 9.8%. Revenues of $3.86 billion surpassed the Zacks Consensus Estimate by 4.9%. It currently carries a Zacks Rank of 2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Boston Scientific has a long-term estimated growth rate of 12.5%. BSX’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 7.5%.
Hologic, carrying a Zacks Rank of 2 at present, has an estimated long-term growth rate of 7.4%. Its earnings surpassed estimates in each of the trailing four quarters, delivering an average surprise of 4.94%.
Hologic’s shares have risen 0.3% year to date compared with the industry’s 4.7% growth.
Universal Health Services has an Earnings ESP of +2.91% and a Zacks Rank of 2 at present. UHS has an estimated earnings growth rate of 30.5% for 2024.
UHS’ earnings surpassed estimates in each of the trailing four quarters, delivering an average surprise of 8.12%.