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Avanos Medical, Inc. (NYSE:AVNS) Is Expected To Breakeven

Simply Wall St

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Avanos Medical, Inc.'s ( NYSE:AVNS ) : Avanos Medical, Inc. operates as a medical technology company that focuses on delivering medical device solutions to improve patients’ quality of life worldwide. With the latest financial year loss of -US$8.5m and a trailing-twelve month of -US$17.5m, the US$1.9b market-cap amplifies its loss by moving further away from its breakeven target. The most pressing concern for investors is AVNS’s path to profitability – when will it breakeven? Below I will provide a high-level summary of the industry analysts’ expectations for AVNS.

View our latest analysis for Avanos Medical

According to the 7 industry analysts covering AVNS, the consensus is breakeven is near. They expect the company to post a final loss in 2019, before turning a profit of US$68m in 2020. AVNS is therefore projected to breakeven around a couple of months from now! How fast will AVNS have to grow each year in order to reach the breakeven point by 2020? Working backwards from analyst estimates, it turns out that they expect the company to grow 88% year-on-year, on average, which signals high confidence from analysts. If this rate turns out to be too aggressive, AVNS may become profitable much later than analysts predict.

NYSE:AVNS Past and Future Earnings, May 31st 2019

Given this is a high-level overview, I won’t go into details of AVNS’s upcoming projects, however, take into account that by and large a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

One thing I’d like to point out is that AVNS has managed its capital judiciously, with debt making up 25% of equity. This means that AVNS has predominantly funded its operations from equity capital,and its low debt obligation reduces the risk around investing in the loss-making company.

Next Steps:

There are key fundamentals of AVNS which are not covered in this article, but I must stress again that this is merely a basic overview. For a more comprehensive look at AVNS, take a look at AVNS’s company page on Simply Wall St . I’ve also compiled a list of essential aspects you should further examine:

  1. Valuation : What is AVNS worth today? Has the future growth potential already been factored into the price? The intrinsic value infographic in our free research report helps visualize whether AVNS is currently mispriced by the market.
  2. Management Team : An experienced management team on the helm increases our confidence in the business – take a look at who sits on Avanos Medical’s board and the CEO’s back ground .
  3. Other High-Performing Stocks : Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here .

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com . This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.