Bearish: Analysts Just Cut Their Avanos Medical, Inc. (NYSE:AVNS) Revenue and EPS estimates
Today is shaping up negative for Avanos Medical, Inc. (NYSE:AVNS) shareholders, with the analysts delivering a substantial negative revision to this year's forecasts. Revenue and earnings per share (EPS) forecasts were both revised downwards, with analysts seeing grey clouds on the horizon.
Following the latest downgrade, the current consensus, from the four analysts covering Avanos Medical, is for revenues of US$682m in 2023, which would reflect a not inconsiderable 17% reduction in Avanos Medical's sales over the past 12 months. Following this this downgrade, earnings are now expected to tip over into loss-making territory, with the analysts forecasting losses of US$0.91 per share in 2023. Previously, the analysts had been modelling revenues of US$763m and earnings per share (EPS) of US$1.08 in 2023. So we can see that the consensus has become notably more bearish on Avanos Medical's outlook with these numbers, making a substantial drop in this year's revenue estimates. Furthermore, they expect the business to be loss-making this year, compared to their previous forecasts of a profit.
Check out our latest analysis for Avanos Medical
Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. We would highlight that sales are expected to reverse, with a forecast 31% annualised revenue decline to the end of 2023. That is a notable change from historical growth of 5.0% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 7.8% per year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Avanos Medical is expected to lag the wider industry.
The Bottom Line
The most important thing to take away is that analysts are expecting Avanos Medical to become unprofitable this year. Regrettably, they also downgraded their revenue estimates, and the latest forecasts imply the business will grow sales slower than the wider market. Given the serious cut to this year's outlook, it's clear that analysts have turned more bearish on Avanos Medical, and we wouldn't blame shareholders for feeling a little more cautious themselves.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for Avanos Medical going out to 2025, and you can see them free on our platform here.
Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies that insiders are buying.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
