Orthopedic, Prosthetic & Surgical Appliances & Supplies
Avanos Medical, Inc., a medical technology company, focuses on delivering medical device solutions in North America, Europe, the Middle East, Africa, the Asia Pacific, and Latin America. It offers a portfolio of chronic care products that include digestive health products, such as Mic-Key enteral feeding tubes, Corpak patient feeding solutions, and NeoMed neonatal and pediatric feeding solutions; and respiratory health products, such as closed airway suction systems and other airway management devices under the Ballard, Microcuff, and Endoclear brands. The company also provides a portfolio of non-opioid pain solutions, including acute pain products, such as On-Q and ambIT surgical pain pumps, Game Ready cold, and compression therapy systems; and interventional pain solutions, which offers minimally invasive pain-relieving therapies, such as Coolief pain relief therapy and OrthogenRx's knee osteoarthritis pain relief injection products. It markets its products directly to hospitals and other healthcare providers, healthcare facilities, and other end-user customers, as well as through third-party wholesale distributors. The company was formerly known as Halyard Health, Inc. and changed its name to Avanos Medical, Inc. in June 2018. Avanos Medical, Inc. was incorporated in 2014 and is headquartered in Alpharetta, Georgia.
Discounted Cash Flow Valuation of Avanos Medical, Inc.
Growth
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Discount
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Multiple
g\r | +10% | +11% | +12% | +13% | +14% |
---|---|---|---|---|---|
0% | 10 | 9 | 8 | 8 | 7 |
+1% | 11 | 10 | 9 | 8 | 8 |
+2% | 13 | 11 | 10 | 9 | 8 |
+3% | 14 | 13 | 11 | 10 | 9 |
+4% | 17 | 14 | 12 | 11 | 10 |
Years | 0 | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 | TV |
---|---|---|---|---|---|---|---|---|---|---|---|---|
FCF | $13.3M | $12.26M | $11.3M | $10.41M | $9.593M | $8.84M | $8.147M | $7.507M | $6.919M | $6.376M | $5.876M | $58.76M |
DCF | $10.66M | $8.541M | $6.844M | $5.485M | $4.395M | $3.522M | $2.822M | $2.262M | $1.812M | $1.452M | $14.52M | |
Value | $62.32M |
In the chart Earnings are multiplied by this value.
High margins render the company resilient under dire circumstances, hence able to drive competitors out or acquire them. ROE and ROA measure the average flow generated by each invested dollar. Their marginal value is a forecast of future growth, and it is considered by Buffett and Munger the most important single indicator.
Years | 12-2015 | 12-2016 | 12-2017 | 12-2018 | 12-2019 | 12-2020 | 12-2021 | 12-2022 | 12-2023 | TTM |
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Net Margin | -27% | 2.5% | 13% | 8.8% | -6.6% | -3.8% | 0.7% | 6.2% | -9.2% | -9.6% |
ROA | -19% | 4.2% | -2% | 0.027% | -3.1% | -2.8% | 0.56% | 4.1% | 0.25% | 0.34% |
ROE | -40% | 3.6% | 6.5% | 4.4% | -3.6% | -2.2% | 0.41% | 3.9% | -5% | -5.1% |
The average Net Margin over the past 5 years is -0.65%.
The trend of Net Margin over the past 5 years is -1.35%.
The average ROA over the past 5 years is -0.15%.
The trend of ROA over the past 5 years is +0.75%.
The average ROE over the past 5 years is -0.34%.
The trend of ROE over the past 5 years is -0.63%.
Being debt the number one cause of investment losses and company death, the ratio Debt/FCF is of utmost importance to guarantee safety. On the other hand the Graham’s stability measures the drawdown of earnings, hence indicating the reliability of the flow generated by the company.
Years | 12-2015 | 12-2016 | 12-2017 | 12-2018 | 12-2019 | 12-2020 | 12-2021 | 12-2022 | 12-2023 | TTM |
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Debt FCF | 21.25 | 3.69 | 6.23 | -1.28 | -1.98 | -7.93 | 1.96 | 3.35 | 12.15 | 14.03 |
Debt Equity | 0.55 | 0.53 | 0.52 | 0.19 | 0.20 | 0.14 | 0.10 | 0.19 | 0.14 | 0.15 |
MIN | ||||||||||
Graham Stability | - | - | - | - | -78% | -90% | - | - | -650% | -650% |
The Debt/FCF trailing twelve month is 14.03.
The trend of Debt/FCF over the past 5 years is 2.66.
Graham’s Stability measure stands at -6.51.
Growth can be dangerous when forecasting, simply projecting the current growth is in general wrong. A company passes through multiple phases, from being young and unprofitable, to the first periods of profitability and high growth, until it arrives at a period of regime with limited growth. Identifying in which phase the company is in may help forecasting.
Years | 12-2016 | 12-2018 | 12-2020 | 12-2022 | Trend |
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Revenue | -12% | 0.64% | -2% | -18% | 1.8% |
Net Income | - | - | - | - | 170% |
Stockholders Equity | 1.6% | -0.96% | -0.54% | -4.3% | 1.1% |
FCF | -29% | - | - | -80% | -25% |
The Revenue CAGR over the past 5 years is +0.64%.
The trend of Revenue growth rate over the past 5 years is +1.77%.
The Earnings CAGR over the past 5 years is -.
The trend of Earnings growth rate over the past 5 years is +174.46%.
The Equity CAGR over the past 5 years is -0.96%.
The trend of Equity growth rate over the past 5 years is +1.1%.
The FCF CAGR over the past 5 years is -.
The trend of FCF growth rate over the past 5 years is -24.66%.