U.S. markets closed
  • S&P 500

    4,538.43
    -38.67 (-0.84%)
     
  • Dow 30

    34,580.08
    -59.71 (-0.17%)
     
  • Nasdaq

    15,085.47
    -295.85 (-1.92%)
     
  • Russell 2000

    2,159.31
    -47.02 (-2.13%)
     
  • Crude Oil

    66.22
    -0.28 (-0.42%)
     
  • Gold

    1,782.10
    +21.40 (+1.22%)
     
  • Silver

    22.57
    +0.25 (+1.12%)
     
  • EUR/USD

    1.1317
    +0.0012 (+0.10%)
     
  • 10-Yr Bond

    1.3430
    -0.1050 (-7.25%)
     
  • GBP/USD

    1.3235
    -0.0067 (-0.50%)
     
  • USD/JPY

    112.8000
    -0.4090 (-0.36%)
     
  • BTC-USD

    53,560.45
    -3,208.66 (-5.65%)
     
  • CMC Crypto 200

    1,367.14
    -74.62 (-5.18%)
     
  • FTSE 100

    7,122.32
    -6.89 (-0.10%)
     
  • Nikkei 225

    28,029.57
    +276.20 (+1.00%)
     

Why Is Avanos Medical (AVNS) Up 3.7% Since Last Earnings Report?

  • Oops!
    Something went wrong.
    Please try again later.
·3 min read
In this article:
  • Oops!
    Something went wrong.
    Please try again later.

It has been about a month since the last earnings report for Avanos Medical (AVNS). Shares have added about 3.7% in that time frame, underperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Avanos Medical due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.

Avanos Medical Q3 Earnings and Revenues Top Estimates

Avanos Medical, Inc. reported adjusted earnings per share of 21 cents in third-quarter 2020, beating the Zacks Consensus Estimate of earnings per share of 14 cents by 50%. However, the bottom line declined 30% from the prior-year quarter.

Revenues of the company were $185.7 million, which beat the Zacks Consensus Estimate by 11.9%. Also, the top line rose 8.3% on a year-over-year basis.

Q3 Segmental Analysis

Chronic Care

Net revenues at this segment of $119.3 million rose 21.7% year over year.

Pain Management

The segment reported net revenues of $66.4 million. The metric declined 9.5% on a year-over-year basis.

Margin Analysis

Gross profit was $96 million, up 0.8% from the prior-year quarter. Gross margin was 51.6% of net revenues, down 384 bps year over year.

Adjusted operating profit in the third quarter was $5 million, down 157.8% from the year-ago quarter. Adjusted operating margin came in at 2.8%, showing an expansion of 805 bps.

Financial Update

As of Sep 30, 2020 cash and cash equivalents totaled $180 million compared with$185 million as of Jun 30, 2020.

Cumulative net cash used in operating activities at the end of third quarter totaled $3.6 million, compared with net cash utilized in operating activities of $71.6 million in the prior-year quarter.

Guidance

In view of the ongoing uncertainty related to the COVID-19 pandemic, the company has withdrawn its 2020 outlook  (provided on Feb 25, 2020). At this point, the company is unable to fully quantify the scope or duration of the impact of the pandemic on its financial results.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed an upward trend in estimates review. The consensus estimate has shifted 7.32% due to these changes.

VGM Scores

Currently, Avanos Medical has a subpar Growth Score of D, however its Momentum Score is doing a lot better with an A. However, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.

Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Avanos Medical has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
AVANOS MEDICAL, INC. (AVNS) : Free Stock Analysis Report
 
To read this article on Zacks.com click here.