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Investing.com - Raymond (NSE:RYMD) James upgraded Aveanna Healthcare Holdings Inc (NASDAQ:AVAH) from Market Perform to Outperform and established a price target of $9.00. The stock, currently trading at $6.14, has shown remarkable momentum with a 61% gain in the past week and is trading near its 52-week high of $6.46.
The upgrade follows Aveanna’s second-quarter results that significantly exceeded both company guidance and consensus forecasts, according to Raymond James. The company’s revenue reached $2.18 billion in the last twelve months, with a healthy gross profit margin of 33.3%. InvestingPro data shows that two analysts have recently revised their earnings estimates upward for the upcoming period.
The research firm cited multiple factors supporting its more positive outlook, including projected deleveraging as EBITDA grows and free cash flow is applied to debt reduction. Raymond James expects proforma leverage on its new 2027 forecast of $320 million EBITDA to reach 4.2x, substantially below 2023 leverage of approximately 10x.
Raymond James also noted potential valuation upside, with Aveanna currently trading at 8.2x the firm’s 2027 EBITDA estimate compared to low-double-digit multiples typical of higher quality post-acute providers.
The firm additionally highlighted the possibility of a debt refinancing opportunity based on Aveanna’s "dramatically improved credit profile," which Raymond James believes could add $10-15 million to earnings per share and free cash flow.
In other recent news, Aveanna Healthcare Holdings Inc. announced impressive financial results for the second quarter of 2025, surpassing market expectations. The company reported earnings per share of $0.18, significantly higher than the anticipated $0.04, representing a 350% surprise. Revenue for the quarter was $590 million, exceeding projections of $533.92 million by 10.43%. These robust figures highlight Aveanna Healthcare’s strong performance during the period. Investors and analysts were taken by surprise with the company’s ability to outperform forecasts. The results reflect positively on Aveanna Healthcare’s operational strategies and market positioning. This development is a key highlight for stakeholders and financial analysts monitoring the company’s progress.
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