Aveanna Healthcare Soars 14.39% on Jefferies Upgrade

Aveanna Healthcare's stock surged 14.39% in pre-market trading on July 21, 2025, marking a significant rise that has caught the attention of investors and analysts alike.

Jefferies Financial Group has upgraded Aveanna Healthcare from a "hold" rating to a "buy" rating, despite slightly lowering its price target from $6.25 to $6.00. This upgrade comes ahead of the company's second-quarter earnings report, with Jefferies anticipating robust underlying performance and potential earnings surprises. The firm believes that Aveanna's efforts to expand capacity and improve reimbursement terms with payer contracts will drive future growth.

Jefferies' analyst suggests that the recent decline in Aveanna's stock, triggered by home nursing rate adjustments, may have been disproportionate. This is because the Medicare home health segment represents only a minor part of Aveanna's overall operations. The analysis implies that investors may have overreacted to the news, presenting a potential opportunity for buyers.

In the first quarter of 2025, Aveanna Healthcare reported a 14% increase in revenue, reaching approximately $559 million. The company achieved a 93.1% increase in adjusted EBITDA, primarily due to improved payer rates and cost-saving initiatives. Aveanna successfully executed five rate enhancements for its Private Duty Services segment and added two new preferred payer agreements, increasing the total to 24, which now account for 54% of PDS Managed Care Organization volumes.

However, the company faces ongoing challenges, including a tight labor market and wage pressures, which impact its cost of labor and gross margin metrics. Despite these challenges, Aveanna remains optimistic about its future prospects, with a 2025 revenue outlook of greater than $2.15 billion and an adjusted EBITDA outlook of greater than $207 million.