Reasons to Retain Avanos Medical Stock in Your Portfolio Now

Core Insights - Avanos Medical, Inc. (AVNS) is positioned for growth due to its strong product line and solid fiscal second-quarter 2025 performance, despite facing tariff risks and foreign exchange volatility [1][5][12] Financial Performance - Year-to-date, AVNS stock has declined by 22.4%, compared to an 8.2% decline in the industry, while the S&P 500 Composite increased by 11% [2] - The company has a market capitalization of $576.8 million and an earnings yield of 7.4%, which is favorable compared to the industry's negative yield [2] Growth Factors - The Specialty Nutrition Systems (SNS) segment achieved 5% organic growth, driven by strong demand in enteral feeding and the launch of new products, with neonatal solutions growing over 12% [5][10] - The Pain Management and Recovery segment saw nearly 14% growth in radiofrequency ablation, supported by strong generator sales and international momentum for the COOLIEF platform [6][10] Strategic Initiatives - Avanos initiated a three-year Transformation Process in January 2023 to enhance operations and profitability, including divestitures and acquisitions [7][8] - The acquisition of Diros Technology in 2023 expanded the radiofrequency ablation portfolio, reinforcing Avanos's position in non-opioid pain solutions [9] Challenges - The company incurred $8 million in tariff-related costs in Q2 2025, with expectations of up to $15 million in additional costs for the year due to U.S.-China trade tensions [12] - Foreign exchange volatility from a stronger U.S. dollar is projected to reduce reported revenues by about 100 basis points in 2025 [13] Estimate Trends - The Zacks Consensus Estimate for earnings remains stable at 92 cents per share for 2025, with third-quarter 2025 revenue estimates at $166.4 million, indicating a 2.4% decline year-over-year [14]