Avanos Medical (AVNS) Margins Stay Negative Reinforcing Bearish Earnings Narratives

Avanos Medical (AVNS) has wrapped up FY 2025 with Q4 revenue of US$180.9 million and a small loss, as basic EPS came in at a US$0.03 loss per share. Trailing 12 month figures show revenue of US$701.2 million and basic EPS of a US$1.57 loss. Over recent quarters, the company has seen revenue move from US$170.4 million in Q3 2024 to US$179.6 million in Q4 2024, then to US$167.5 million in Q1 2025 and on to US$180.9 million in Q4 2025. EPS has swung from a US$0.13 profit per share in Q3 2024 to a much larger loss in Q4 2024, then back to a US$0.14 profit in Q1 2025, followed by modest quarterly losses through the rest of FY 2025. This keeps the focus on how quickly margins can recover and stabilize from here.

See our full analysis for Avanos Medical.

With the raw numbers on the table, the next step is to set these results against the most widely held narratives around Avanos Medical to see which stories still hold up and which are being challenged by the latest margin trends.

Curious how numbers become stories that shape markets? Explore Community Narratives

Trailing loss of US$72.9 million puts focus on margin repair

• On a trailing 12 month basis, Avanos Medical reported total revenue of US$701.2 million with a net loss of US$72.9 million. The core question for investors is how quickly that loss can narrow while holding on to the current revenue base.
• Critics highlight that earnings have declined at an average rate of 65.3% per year over the past five years and that the company remains unprofitable. That view is supported by the latest figures showing four consecutive quarters where net income, excluding extra items, stayed in loss territory after Q1 2025, with losses of US$76.8 million in Q2 2025 and US$1.3 million in Q4 2025 keeping margins under pressure.

Revenue growth of 2.7% lags wider US market

• Trailing 12 month revenue growth sits at 2.7% per year, compared with a 10.3% per year benchmark for the broader US market. This means the recent move from US$170.4 million in Q3 2024 to US$180.9 million in Q4 2025 has not yet translated into faster top line expansion over the full year.
• What stands out for a bearish narrative is that slower growth is paired with losses, as the company generated US$701.2 million of trailing revenue while remaining unprofitable. That combination of modest growth and negative earnings gives weight to concerns that Avanos needs more than just incremental sales gains to change the longer term earnings trend.

Mixed valuation signals with 0.9x P/S and DCF fair value of US$10.21

• The stock trades on a P/S of 0.9x versus a US Medical Equipment industry average of 3x and a peer average of 2x, yet the current share price of US$13.64 sits above the provided DCF fair value of US$10.21. Investors are therefore getting a lower sales multiple while also seeing a model based value that is below the market price.
• What is interesting for a general market opinion is how this mix of signals pulls in different directions. The relatively low P/S ratio can catch the eye of value focused investors, while the DCF fair value below the share price and the ongoing net loss of US$72.9 million over the last 12 months both underline that any thesis here still rests on a future recovery in profitability rather than on current earnings strength.

Curious how other investors connect these mixed signals to a long term story for Avanos Medical, and whether they think the low P/S outweighs the current losses, check out 📊 Read the what the Community is saying about Avanos Medical.

Next Steps

Don't just look at this quarter; the real story is in the long-term trend. We've done an in-depth analysis on Avanos Medical's growth and its valuation to see if today's price is a bargain. Add the company to your watchlist or portfolio now so you don't miss the next big move.

These mixed signals can feel a bit conflicted, so if you are weighing both the concerns and the positives, it makes sense to move quickly and review the underlying data yourself, then round out the picture with 1 key reward and 1 important warning sign.

Explore Alternatives

Avanos Medical combines modest 2.7% revenue growth with a trailing 12 month loss of US$72.9 million and earnings that remain in negative territory.

If that mix of slower growth and ongoing losses feels uncomfortable, move quickly and scan 78 resilient stocks with low risk scores to focus on companies with more resilient fundamentals.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com