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.
Here's Why You Should Hold Avanos Medical (AVNS) Stock Now
Read MoreHide Full Article
Avanos Medical, Inc. (AVNS - Free Report) is likely to gain from a solid fourth-quarter show, while sluggishness in the Acute Pain business is a concern.
Shares of this company have declined 34.6% against the industry’s 0.9% rise in a year’s time. The current level also compares unfavorably with the S&P 500 index’s 9.6% rise over the same time frame.
This $1.56-billion medical technology company currently has a Zacks Rank #3 (Hold). Avanos’ earnings are expected to grow 13.3% in the first quarter of 2020. Also, the company has a trailing four-quarter positive earnings surprise of 0.1%, on average.
Let’s take a closer look at the factors that are working in favor of the company right now.
Q4 Earnings & Positive Developments
Avanos reported adjusted earnings per share (EPS) of 34 cents in fourth-quarter 2019, which rose by a penny year over year.
Revenues totaled $189.8 million, up 11.7% on a year-over-year basis.
Notably, the core Chronic Care segment recorded revenues of $113.4 million, up 15.5% year over year. Per management, the upside can be attributed to positive organic sales growth.
Additionally, the Pain Management arm reported net revenues of $76.4 million. The metric improved 6.6% on a year-over-year basis.
That’s not all. Management is optimistic about the FDA clearance of its new 80-Watt COOLIEF Radiofrequency System for neurological lesion procedures. Moreover, the upcoming launch of the company’s next-generation enteral feeding tube Mic-Key is likely to boost the Chronic Care unit.
Management at Avanos confirmed that the company expects lower foreign currency impact in 2020 in comparison to 2019.
Deterrents
Avanos continues to see pressure in its Acute Pain business, which saw a soft fourth quarter. Per management, ON-Q sales declined low-single-digits globally in the quarter. Also, in North America, sales declined low single digits.
Estimates Picture
For 2020, the Zacks Consensus Estimate for revenues is pegged at $739.1 million, indicating an improvement of 6% from the year-ago quarter’s reported figure. For adjusted EPS, the same stands at $1.13, suggesting growth of 5.6% from the year-ago reported figure.
Stryker’s long-term earnings growth is expected at 11.9%. The stock has a Zacks Rank #2.
Accuray’s fiscal fourth-quarter earnings is expected to skyrocket 200%.
IDEXX Laboratories’ first-quarter earnings growth is projected at 5.1%.
Today's Best Stocks from Zacks
Would you like to see the updated picks from our best market-beating strategies? From 2017 through 2019, while the S&P 500 gained and impressive +53.6%, five of our strategies returned +65.8%, +97.1%, +118.0%, +175.7% and even +186.7%.
This outperformance has not just been a recent phenomenon. From 2000 – 2019, while the S&P averaged +6.0% per year, our top strategies averaged up to +54.7% per year.
Image: Bigstock
Here's Why You Should Hold Avanos Medical (AVNS) Stock Now
Avanos Medical, Inc. (AVNS - Free Report) is likely to gain from a solid fourth-quarter show, while sluggishness in the Acute Pain business is a concern.
Shares of this company have declined 34.6% against the industry’s 0.9% rise in a year’s time. The current level also compares unfavorably with the S&P 500 index’s 9.6% rise over the same time frame.
This $1.56-billion medical technology company currently has a Zacks Rank #3 (Hold). Avanos’ earnings are expected to grow 13.3% in the first quarter of 2020. Also, the company has a trailing four-quarter positive earnings surprise of 0.1%, on average.
Let’s take a closer look at the factors that are working in favor of the company right now.
Q4 Earnings & Positive Developments
Avanos reported adjusted earnings per share (EPS) of 34 cents in fourth-quarter 2019, which rose by a penny year over year.
Revenues totaled $189.8 million, up 11.7% on a year-over-year basis.
AVANOS MEDICAL, INC. Price and Consensus
AVANOS MEDICAL, INC. price-consensus-chart | AVANOS MEDICAL, INC. Quote
Notably, the core Chronic Care segment recorded revenues of $113.4 million, up 15.5% year over year. Per management, the upside can be attributed to positive organic sales growth.
Additionally, the Pain Management arm reported net revenues of $76.4 million. The metric improved 6.6% on a year-over-year basis.
That’s not all. Management is optimistic about the FDA clearance of its new 80-Watt COOLIEF Radiofrequency System for neurological lesion procedures. Moreover, the upcoming launch of the company’s next-generation enteral feeding tube Mic-Key is likely to boost the Chronic Care unit.
Management at Avanos confirmed that the company expects lower foreign currency impact in 2020 in comparison to 2019.
Deterrents
Avanos continues to see pressure in its Acute Pain business, which saw a soft fourth quarter. Per management, ON-Q sales declined low-single-digits globally in the quarter. Also, in North America, sales declined low single digits.
Estimates Picture
For 2020, the Zacks Consensus Estimate for revenues is pegged at $739.1 million, indicating an improvement of 6% from the year-ago quarter’s reported figure. For adjusted EPS, the same stands at $1.13, suggesting growth of 5.6% from the year-ago reported figure.
Key Picks
Some better-ranked companies in the broader medical sector include Stryker Corporation (SYK - Free Report) , Accuray Incorporated (ARAY - Free Report) and IDEXX Laboratories, Inc. (IDXX - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Stryker’s long-term earnings growth is expected at 11.9%. The stock has a Zacks Rank #2.
Accuray’s fiscal fourth-quarter earnings is expected to skyrocket 200%.
IDEXX Laboratories’ first-quarter earnings growth is projected at 5.1%.
Today's Best Stocks from Zacks
Would you like to see the updated picks from our best market-beating strategies? From 2017 through 2019, while the S&P 500 gained and impressive +53.6%, five of our strategies returned +65.8%, +97.1%, +118.0%, +175.7% and even +186.7%.
This outperformance has not just been a recent phenomenon. From 2000 – 2019, while the S&P averaged +6.0% per year, our top strategies averaged up to +54.7% per year.
See their latest picks free >>