Aveanna's Guidance: A Prudent Reset or a Missed Beat?

The market had already priced in a stellar 2025. Aveanna's third-quarter report delivered a massive beat, with revenue surging 22.2% year-over-year to $621.9 million and adjusted EBITDA jumping 67.5% to $80.1 million. The stock's reaction to that print was telling: it had already rallied 88.25% over the past year, a run that reflected strong momentum and high expectations. In reality, the beat was the minimum required to meet the whisper number for the year.

The true test came with the forward view. After the company's J.P. Morgan presentation this morning, the stock fell in pre-market trading. This is classic "sell the news" behavior. The market had bid up the shares on the strength of the 2025 beat and the promise of continued growth. What it got instead was a 2026 outlook that, while solid, appears to reset expectations to a more normalized pace. The expectation gap is now clear: the market was looking for a continuation of the explosive 2025 growth trajectory, but the guidance suggests a more stable, perhaps even slightly slower, expansion ahead.

The 2026 Outlook: A Guidance Reset in Disguise?

The 2026 guidance is a clear reset. After a 22.2% revenue beat in the third quarter, the market was looking for a continuation of that high-single-digit growth. Instead, management is anchoring the new year on a much slower pace. The initial 2026 revenue range of $2.54–$2.56 billion implies growth of just about 4.5% to 5.5% over the high end of the newly raised 2025 forecast. That is a significant deceleration from the 2025 trajectory and resets the expectation gap.

Management is framing this as a move to "normalized" operations. They are explicitly anchoring 2025's adjusted EBITDA at $300 million, attributing roughly $20 million of the raised guidance to non-recurring timing items. This is a classic sandbagging tactic: they are pulling forward one-time benefits to make the current year look stronger, then guiding from a lower, more sustainable base. The 2026 adjusted EBITDA range of $318–$322 million suggests a plateau or slight expansion from that normalized 2025 level, not a continuation of the explosive 67.5% EBITDA growth seen in 2025.

Viewed another way, the guidance sets a new, higher bar for 2026. The bar was already high after the 2025 beat, but the 2026 outlook suggests the company is choosing stability over spectacular acceleration. This is a prudent, conservative setup that meets the new bar by accepting a slower growth rate. For investors, the question is whether this reset is enough to justify the stock's prior run-up. The market's pre-market sell-off suggests it sees the guidance as a disappointment, a reset from the high expectations priced in after the stellar 2025 print.

The post-event stock decline reveals a clear disconnect between the market's pre-event expectations and the new reality laid out by management. While analysts from RBC, Raymond James, and William Blair have maintained positive ratings, the stock's reaction suggests their consensus outlook was for a more aggressive growth trajectory than what was provided. The guidance reset from high-single-digit 2025 growth to sub-6% 2026 growth is a material change that may not have been fully anticipated by the street.

Management's framing of a "normalized" 2025 EBITDA of $300 million is the key to understanding this gap. They are explicitly pulling forward timing-related items to make the current year look stronger, then guiding from a lower, more sustainable base. This creates a new, higher bar for 2026. The initial revenue range of $2.54–$2.56 billion implies growth of just about 4.5% to 5.5% over the high end of the newly raised 2025 forecast. That is a significant deceleration from the 22.2% revenue beat in the third quarter and resets the expectation gap.

The focus on a plateau in 2026 adjusted EBITDA, ranging from $318 to $322 million, shifts the investment thesis from explosive growth to operational stability and leverage reduction. Analysts like Raymond James have raised price targets based on improved debt-paydown timing and higher future EBITDA estimates, but the immediate guidance suggests the company is choosing a slower, steadier path. This is a prudent, conservative setup that meets the new bar by accepting a slower growth rate. For investors, the question is whether this reset is enough to justify the stock's prior run-up. The market's pre-market sell-off suggests it sees the guidance as a disappointment, a reset from the high expectations priced in after the stellar 2025 print.

Catalysts and Risks: The 2026 Execution Test

The guidance reset has set a new, lower bar. Now, the stock's path depends on whether Aveanna can meet that bar convincingly and, more importantly, whether it can demonstrate a credible path to exceeding it. The primary catalyst is the Q4 2025 earnings report, which will test the company's own anchor for "normalized" adjusted EBITDA. Management has explicitly stated that 2025 adjusted EBITDA of $300 million is the sustainable baseline, with the raised guidance of $318–$322 million including timing-related items. The fourth-quarter print will show if the company can deliver against that normalized figure, providing the first real-world validation of the new, steadier growth model.

A key risk is the sustainability of the 2026 growth rate. The initial revenue range of $2.54–$2.56 billion implies growth of just about 4.5% to 5.5% over the high end of the raised 2025 forecast. If the market perceives this sub-6% expansion as too slow after the explosive 2025 beat, it could trigger a second guidance reset. This is especially true given the headwinds management has flagged. Chief Strategy Officer Deborah Stewart noted that reimbursement challenges could persist into 2026, citing state budget-driven rate volatility and a general headwind from the OBBBA reality settling in on Medicaid systems. If these pressures materialize, they could compress margins and make the plateau in 2026 adjusted EBITDA harder to maintain.

Therefore, investors must monitor for any updates on Medicaid rate wins in 2026. These are critical to offsetting the reimbursement headwinds and supporting the EBITDA plateau. Management has already achieved rate wins in at least 10 states this year, with a target of 10 more. However, they also cautioned that future PDS rate wins "be generally smaller than they've been over the course of last two point five years", signaling reduced pricing momentum. Any positive news on securing new, meaningful rate increases will be a key signal that the company can navigate the headwinds and justify a re-rating. Conversely, a lack of progress could cement the view that the guidance reset is permanent.