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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
Net revenues at this segment of $119.3 million rose 21.7% year over year.
The segment reported net revenues of $66.4 million. The metric declined 9.5% on a year-over-year basis.
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.
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.
In view of the ongoing uncertainty related to the COVID-19 pandemic, the company has withdrawn its 2020 outlook (provided on Feb 25, 2020).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.
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.
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.
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AVANOS MEDICAL, INC. (AVNS) : Free Stock Analysis Report
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