Fresh Strong Sell Stocks for October 31st
Stocks Added to Zacks Rank #5: Three stocks, 1-800-FLOWERS.COM (FLWS), Bridgeline Digital (BLIN), and Avita Medical (RCEL), have been added to the Zacks Rank #5 (Strong Sell) List due to significant downward revisions in their earnings estimates over the past 60 days.
Earnings Estimate Revisions: 1-800-FLOWERS.COM's earnings estimate was revised down by 87.9%, Bridgeline Digital's by 12%, and Avita Medical's by 6.5%, indicating potential challenges for these companies.
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- Revenue Growth: AVITA Medical reported approximately $17.6 million in revenue for Q4 2025, reflecting an 11% increase over 2024, demonstrating the company's resilience in market demand despite reimbursement uncertainties.
- Gross Margin Shift: The gross margin for Q4 was 81.2%, down from 87.6% in the same period last year, primarily due to inventory reserves and product mix, which may impact future profitability and investor confidence.
- Future Outlook: The company projects full-year 2026 revenue between $80 million and $85 million, representing growth of approximately 12% to 19%, based on the normalization of RECELL utilization and expanded portfolio use within core accounts, indicating management's confidence in future growth.
- Financial Discipline: AVITA successfully reduced cash requirements from $10 million to $5 million under a new credit facility, enhancing the company's financial flexibility and allowing it to focus more on execution and growth strategies.
- Investor Webinar: AVITA Medical will host an investor webinar on February 18, 2026, at 2:00 p.m. PST, featuring CEO Cary Vance and CFO David O'Toole discussing Q4 and full-year 2025 financial and business results, which is expected to attract significant shareholder and investor interest.
- Financial Performance Review: The webinar will review AVITA Medical's recent financial performance, particularly the overall results for fiscal year 2025, helping investors gain insights into the company's financial health and future growth potential.
- Technology Innovation Showcase: AVITA's RECELL technology has received FDA approval for treating thermal burns and trauma wounds, showcasing the company's innovative capabilities in accelerating wound healing, which is expected to enhance clinical outcomes and strengthen market competitiveness.
- International Market Expansion: RECELL has received approvals in various international markets, including the CE mark in Europe and TGA registration in Australia, indicating AVITA Medical's ongoing global business expansion and increasing market recognition.
- Earnings Announcement Schedule: AVITA Medical (RCEL) is set to release its Q4 earnings on February 12 after market close, with a consensus EPS estimate of -$0.38, reflecting a 13.6% year-over-year improvement, indicating potential recovery in profitability.
- Revenue Expectations: The anticipated revenue for Q4 is $17.45 million, representing a 5.2% year-over-year decline, which highlights challenges the company faces in a competitive market that could impact its short-term financial performance.
- Historical Performance Review: Over the past year, AVITA Medical has met EPS and revenue estimates 50% of the time, suggesting a level of stability in financial transparency and market adaptability.
- Estimate Revision Dynamics: In the last three months, EPS estimates have seen 2 upward revisions and 3 downward revisions, while revenue estimates have experienced no upward revisions and 4 downward revisions, reflecting a cautious market sentiment regarding the company's future performance.

- Soleno Stock Decline: Following a report from Scorpion Capital labeling Soleno Therapeutics' Vykat XR as overpriced and potentially unsafe for children, the stock plummeted by 7.41% to close at $71.63 on August 15, 2025, indicating significant market concerns regarding product safety.
- Avita Financial Struggles: Avita Medical revealed a backlog of unpaid claims affecting demand for its Recell product in its Q2 2025 report, leading to a 21% drop in stock price to $4.25 on August 8, 2025, highlighting major challenges in medical claims management.
- Coty's Disappointing Performance: Coty reported an unexpected loss and provided disappointing guidance for FY 2025, resulting in a 21.6% decline in stock price to $3.81 on August 21, 2025, reflecting broader market challenges and shifts in consumer behavior impacting sales.
- Legal Investigation Impact: Bragar Eagel & Squire is investigating potential federal securities law violations by these three companies, which could lead to further legal and financial repercussions, necessitating investor vigilance regarding future developments to assess potential risks.
- New Board Appointment: AVITA Medical announces the appointment of Joe Woody as a new non-executive director, bringing over 20 years of leadership experience in the med-tech sector, which will be crucial for the company's growth trajectory.
- Leadership Transition: Lou Panaccio retires after over a decade of service, having served as Chairman and significantly shaped the company's commercial and operational strategies, ensuring stability in the market.
- Rich Industry Experience: Joe Woody's previous roles include CEO of Avanos Medical and executive positions at Acelity Holdings, enhancing the board's depth of expertise with his extensive background in the industry.
- Strategic Value Enhancement: The addition of the new director not only strengthens AVITA Medical's leadership team but also supports the company's innovation and market expansion in acute wound care solutions.

- Conference Appearance: AVITA Medical CEO Cary Vance will present at the 44th Annual J.P. Morgan Healthcare Conference on January 14, 2026, at 5:15 PM, showcasing the company's innovative solutions in acute wound care, which is expected to attract investor and industry attention.
- Live Webcast: The presentation will be accessible via a live audio webcast on AVITA Medical's website, allowing global investors to stay updated on the company's latest developments, thereby enhancing transparency and investor confidence.
- Technological Advantage: AVITA Medical's RECELL® System is FDA-approved to utilize patients' own skin to accelerate wound healing and improve clinical outcomes, which is anticipated to further solidify the company's leadership position in the acute wound care market.
- International Market Expansion: The RECELL System has received multiple regulatory approvals in international markets for various applications, including thermal burns and trauma, indicating AVITA Medical's potential for growth and market opportunities on a global scale.




