Avanos Medical Inc (AVNS, Financial), a key player in the medical devices and instruments industry, has recently seen a significant uptick in its stock performance. Over the past week, the company's stock price has surged by 7.07%, and over the last three months, it has gained an impressive 33.84%. Currently, the company's market capitalization stands at $1.13 billion with a stock price of $24.61. According to GuruFocus's valuation, Avanos is modestly undervalued with a GF Value of $29.68, despite being considered a possible value trap three months ago.
Overview of Avanos Medical Inc
Avanos Medical Inc is a United States-based company that specializes in developing and selling medical devices and related services globally. The company has streamlined its operations into two main product categories: Digestive Health and Pain Management and Recovery. These changes aim to enhance focus and drive revenue growth primarily in North America. Avanos's strategic shift in its business model reflects its adaptability and commitment to meeting the evolving needs of healthcare providers and patients.
Assessing Profitability
Avanos Medical's Profitability Rank is currently at 4 out of 10. The company's Operating Margin stands at 2.10%, which is better than 52.34% of its peers in the industry. However, its Return on Equity (ROE) and Return on Assets (ROA) are in the negative territory at -5.00% and -3.67% respectively, although these figures are still better than nearly half of the companies in the sector. The Return on Invested Capital (ROIC) is also negative at -0.58%, but it surpasses 51.4% of industry competitors. Avanos has managed to maintain profitability for six out of the past ten years, which is commendable given the competitive nature of the industry.
Growth Metrics
The company's Growth Rank is 3 out of 10. Avanos has experienced a slight decline in its 3-year and 5-year revenue growth rates per share, at -1.10% and -0.10% respectively. Despite these challenges, the company's future revenue growth rate over the next 3 to 5 years is estimated at 4.57%, which is better than 8.33% of its competitors. Furthermore, the future EPS growth rate is projected at an impressive 25.97%, outperforming 51.22% of its peers. This suggests potential for significant improvement in earnings, which could be a key driver for future stock performance.
Notable Shareholders
Avanos Medical has attracted the attention of several prominent investors. Paul Tudor Jones (Trades, Portfolio) holds 75,856 shares, representing 0.17% of the company, while Joel Greenblatt (Trades, Portfolio) owns 33,988 shares, or 0.07%. Ray Dalio (Trades, Portfolio) also holds a stake in Avanos, with 17,261 shares, accounting for 0.04% of the company. The involvement of these respected investors could indicate confidence in the company's future prospects.
Competitive Landscape
Avanos Medical operates in a highly competitive environment. Its main competitors include Establishment Labs Holdings Inc (ESTA, Financial) with a market cap of $1.27 billion, Quanterix Corp (QTRX, Financial) valued at $578.836 million, and RxSight Inc (RXST, Financial) with a market cap of $1.81 billion. These companies are closely matched in terms of market capitalization, highlighting the competitive nature of the industry.
Conclusion
In conclusion, Avanos Medical Inc's recent stock performance has been notably strong, with significant gains over the past quarter. The company's strategic focus on key product categories and its potential for future earnings growth present a compelling case for investors. However, it's important to consider the competitive landscape and the company's current profitability metrics when making investment decisions. As Avanos continues to navigate the complexities of the medical devices market, it remains a noteworthy stock for investors to watch.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
