Value
7.9/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 9.5 |
| P/S | 9.8 |
| EV/EBITDA | 5.5 |
| Fwd P/E | 9.0 |
| PEG | 10.0 |
| Analyst target | 4.0 |
- ▸Forward P/E: 11.8x
- ▸PEG: 0.02
- ▸Attractively valued
AVAH · Why this verdict
Why Aveanna Healthcare Holdings (AVAH) is rated HOLD
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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VerdictHOLD
Overall score6.0/10
ConfidenceMEDIUM
MacroNEUTRAL
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
The company has beaten consensus EPS estimates in all four of the most recent quarters, averaging a 118% positive surprise, with earnings estimates trending upward — indicating a business that is consistently out-executing expectations. Catalyst breakdown | The beat streak extends to at least six consecutive quarters and the average positive surprise remains above 20% over the next two reported periods. | →Stable |
| CounterThe average is heavily skewed by a single 405% beat in the August 2025 quarter; stripping that outlier reduces the average materially, making the streak appear less impressive and more vulnerable to normalization in a single print. | ||
At a forward price-to-earnings multiple of 9.4 times and a PEG ratio of 0.02, the stock ranks among the most attractively priced names on a growth-adjusted basis versus peers, with analyst consensus implying approximately 39% upside from current levels. Valuation breakdown | Forward P/E stays below 15 times and the PEG remains below 0.1 as earnings growth sustains its current trajectory over the next 12 months. | →Stable |
| CounterA low PEG ratio in a high-leverage business can be misleading if earnings growth is partially driven by financial leverage rather than operating improvement; any increase in financing costs could simultaneously slow earnings growth and compress the apparent valuation discount. | ||
A debt-to-equity ratio of 6.2 triggers a significant financial penalty; at this leverage level, even a modest softening in cash generation would leave the business with limited flexibility to service debt obligations or invest in growth. Bear case | Debt-to-equity ratio falls below 4.0 within 6 quarters as operating cash flow is directed toward debt reduction. | →Stable |
| CounterIf the earnings beat streak persists and EBITDA continues to grow faster than consensus expects, leverage ratios can improve rapidly through earnings power alone — without requiring asset sales or equity issuance. | ||
Free cash flow represents only 32% of reported net income — a red-flag quality concern — meaning that despite consistent earnings beats, less than one-third of reported profits is materializing as spendable cash. Quality breakdown | Free cash flow as a percentage of net income rises above 60% for 2 consecutive quarters, signaling that earnings quality is improving toward the level the headline profit numbers imply. | →Stable |
| CounterBelow-average cash conversion in a healthcare services business can reflect working capital timing such as billing cycles and reimbursement lags rather than structural accrual inflation; if receivables normalization is the driver, cash conversion can recover quickly without any underlying deterioration. | ||
The stock is trading below its 200-day moving average, yet that average is itself rising at roughly 2.9% per month — consistent with a temporary pullback within an established uptrend rather than a confirmed breakdown. Momentum breakdown | Price reclaims the 200-day moving average within 60 days and sustains above it for at least 30 consecutive trading days. | →Stable |
| CounterA death cross — where the 50-day moving average crosses below the 200-day — would shift this from a pullback-in-uptrend characterization to a confirmed distribution phase, materially weakening the technical case. | ||
The company has beaten consensus EPS estimates in all four of the most recent quarters, averaging a 118% positive surprise, with earnings estimates trending upward — indicating a business that is consistently out-executing expectations.
→StableCatalyst breakdown
- Expectation
- The beat streak extends to at least six consecutive quarters and the average positive surprise remains above 20% over the next two reported periods.
CounterThe average is heavily skewed by a single 405% beat in the August 2025 quarter; stripping that outlier reduces the average materially, making the streak appear less impressive and more vulnerable to normalization in a single print.
At a forward price-to-earnings multiple of 9.4 times and a PEG ratio of 0.02, the stock ranks among the most attractively priced names on a growth-adjusted basis versus peers, with analyst consensus implying approximately 39% upside from current levels.
→StableValuation breakdown
- Expectation
- Forward P/E stays below 15 times and the PEG remains below 0.1 as earnings growth sustains its current trajectory over the next 12 months.
CounterA low PEG ratio in a high-leverage business can be misleading if earnings growth is partially driven by financial leverage rather than operating improvement; any increase in financing costs could simultaneously slow earnings growth and compress the apparent valuation discount.
A debt-to-equity ratio of 6.2 triggers a significant financial penalty; at this leverage level, even a modest softening in cash generation would leave the business with limited flexibility to service debt obligations or invest in growth.
→StableBear case
- Expectation
- Debt-to-equity ratio falls below 4.0 within 6 quarters as operating cash flow is directed toward debt reduction.
CounterIf the earnings beat streak persists and EBITDA continues to grow faster than consensus expects, leverage ratios can improve rapidly through earnings power alone — without requiring asset sales or equity issuance.
Free cash flow represents only 32% of reported net income — a red-flag quality concern — meaning that despite consistent earnings beats, less than one-third of reported profits is materializing as spendable cash.
→StableQuality breakdown
- Expectation
- Free cash flow as a percentage of net income rises above 60% for 2 consecutive quarters, signaling that earnings quality is improving toward the level the headline profit numbers imply.
CounterBelow-average cash conversion in a healthcare services business can reflect working capital timing such as billing cycles and reimbursement lags rather than structural accrual inflation; if receivables normalization is the driver, cash conversion can recover quickly without any underlying deterioration.
The stock is trading below its 200-day moving average, yet that average is itself rising at roughly 2.9% per month — consistent with a temporary pullback within an established uptrend rather than a confirmed breakdown.
→StableMomentum breakdown
- Expectation
- Price reclaims the 200-day moving average within 60 days and sustains above it for at least 30 consecutive trading days.
CounterA death cross — where the 50-day moving average crosses below the 200-day — would shift this from a pullback-in-uptrend characterization to a confirmed distribution phase, materially weakening the technical case.
TrendMatrix Research · core thesis
Engine thesis — one sentence
Aveanna Healthcare has strung together four straight earnings beats with a 118% average positive surprise and trades at a forward price-to-earnings multiple of 9.4 times — but a debt-to-equity ratio of 6.2 and free cash flow converting at only 32% of net income are meaningful structural risks that cap near-term position size.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Per-dimension breakdown
Quality
5.5/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 10.0 |
| ROA | 6.8 |
| Gross margin | 2.6 |
| Op margin | 4.5 |
| Net margin | 5.2 |
| Current ratio | 5.4 |
| FCF quality | 2.5 |
| Moat | 6.0 |
| Piotroski F | 6.7 |
- ▸Excellent ROE: 368%
- ▸Earnings quality RED FLAG: 32% FCF/NI
Growth
6.5/10data confidence 33%| Component | Sub-score |
|---|---|
| Rev growth | 6.5 |
Momentum
7.1/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 3.2 |
| MACD | 9.2 |
| OBV | 10.0 |
| MA position | 9.0 |
| Volume | 4.3 |
- ▸Overbought (RSI 96)
- ▸Volume accumulation (rising OBV)
- ▸Above 200-day MA
Sentiment
5.8/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 5.0 |
| Price target | 6.5 |
| erm sentiment | 6.2 |
Insider
3.0/10data confidence 75%| Component | Sub-score |
|---|---|
| materiality | 2.0 |
| insider conviction | 2.0 |
| holder change | 5.0 |
- ▸Heavy insider selling — $148,119,227 (7.475% of mkt cap)
Peer rank
6.2/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 7.7 |
| quality rank | 9.6 |
| growth rank | 7.4 |
- ▸Attractive P/E vs peers
- ▸Superior ROE vs peers
Technical
3.1/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 0.9 |
| support resistance | 0.8 |
| 52w position | 7.6 |
Risk (lower is worse)
4.6/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 8.0 |
| days to cover | 8.9 |
| volatility | 3.1 |
| put call | 8.3 |
| implied vol | 0.0 |
| beta | 3.7 |
| debt equity | 0.0 |
- ▸High IV: 113%
- ▸Concentration risks: 1 HIGH (10-K Item 1A — sized via position_sizing, validated via buy_confidence)
Catalyst
7.9/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 6.5 |
| earnings history | 10.0 |
| earnings timing | 5.0 |
| surprise avg | 10.0 |
- ▸Perfect beat streak: 4Q
How the verdict was assembled
Engine trigger
Multiple concerning factors. Consider reducing position. | News modifier +1 (SELL_IF_HOLDING → HOLD_IF_HOLDING).
Engine technical detail
verdict_path:
L4:PATH_F_SELL|L3:NEWS_MOD=+1Passed (6)
- MOMENTUM:7.1>=5.5
- 8K:CLEAN
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:34d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (2)
- ASYMMETRY:-0.3=NEGATIVE
- INSIDER:7.47%=EXTREME
Warning (0)
none
Reward-to-Risk
-0.26
Upside
-3.9%
Downside
15.0%
Sizing output
AVOID
Setup— — No clear chart pattern; technical signals are mixed
EdgeInst Constrain — Small cap ($2.0B) below institutional reach
SuitabilityAggressive — Beta 1.89>1.3, MCap $2.0B<$5B
Investment implication
The F-path SELL output reflects an overall score of 4.5 below the 5.4 soft trigger — multiple weakening dimensions accumulated rather than a single hard-floor breach. The strongest dimension ( Value at 7.9) was not enough to lift the adjusted overall above the threshold. Co-occurring failed gates ( ASYMMETRY:-0.3=NEGATIVE, INSIDER:7.47%=EXTREME) reinforce the read. Current asymmetry R:R is -0.26 — supplementary context, not the trigger for this path.
The strongest dimensions are Value at 7.9, Catalyst at 7.9, and Momentum at 7.1; the weakest are Insider at 3.0, Technical at 3.1, and Risk (lower is worse) at 4.6. The V9 engine flagged 2 failed gates, producing an asymmetric reward-to-risk of -0.26 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Strong Earnings Beat Streak
Trip ifEPS surprise falls below 0% in any single reported quarter.
- P2Attractive Growth Adjusted Valuation
Trip ifForward price-to-earnings multiple expands above 18 times for 2 consecutive quarters.
- P3High Leverage Financial Vulnerability
Trip ifDebt-to-equity ratio falls below 4.0 for 2 consecutive reporting periods.
- P4Weak Cash Conversion Quality Flag
Trip ifFree cash flow as a percentage of net income rises above 60% for 2 consecutive quarters.
- P5Pullback Within Rising Trend
Trip if200-day moving average slope turns negative for more than 20 consecutive trading days while price remains more than 5% below the 200-day average.