Aveanna Healthcare Holdings Inc. Beat Analyst Profit Forecasts, And Analysts Have New Estimates

The investors in Aveanna Healthcare Holdings Inc.'s (NASDAQ:AVAH) will be rubbing their hands together with glee today, after the share price leapt 20% to US$4.71 in the week following its second-quarter results. It was overall a positive result, with revenues beating expectations by 2.3% to hit US$505m. Aveanna Healthcare Holdings also reported a statutory profit of US$0.07, which was a nice improvement from the loss that the analysts were predicting. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

See our latest analysis for Aveanna Healthcare Holdings

Following last week's earnings report, Aveanna Healthcare Holdings' seven analysts are forecasting 2024 revenues to be US$1.99b, approximately in line with the last 12 months. Losses are predicted to fall substantially, shrinking 96% to US$0.026. Before this earnings announcement, the analysts had been modelling revenues of US$1.98b and losses of US$0.12 per share in 2024. While the revenue estimates were largely unchanged, sentiment seems to have improved, with the analysts upgrading their numbers and making a considerable decrease in losses per share in particular.

These new estimates led to the consensus price target rising 61% to US$4.20, with lower forecast losses suggesting things could be looking up for Aveanna Healthcare Holdings. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. There are some variant perceptions on Aveanna Healthcare Holdings, with the most bullish analyst valuing it at US$5.00 and the most bearish at US$2.80 per share. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. It's pretty clear that there is an expectation that Aveanna Healthcare Holdings' revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 3.5% growth on an annualised basis. This is compared to a historical growth rate of 7.0% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 6.8% per year. Factoring in the forecast slowdown in growth, it seems obvious that Aveanna Healthcare Holdings is also expected to grow slower than other industry participants.

The Bottom Line

The most important thing to take away is that the analysts reconfirmed their loss per share estimates for next year. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Aveanna Healthcare Holdings' revenue is expected to perform worse than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Aveanna Healthcare Holdings analysts - going out to 2026, and you can see them free on our platform here.

That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 2 warning signs with Aveanna Healthcare Holdings , and understanding these should be part of your investment process.

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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.