Aveanna Healthcare (NASDAQ:AVAH) shares fell around 16% since the company’s reported Q4 earnings results last week, with revenue coming in at $451.1 million, up 9% year-over-year. Gross margin grew 3.5% year-over-year to $128.8 million.

Management provided its fiscal 2023 outlook, expecting revenue of at least $1.84 billion and adjusted EBITDA of at least $130 million. Management notes that demand for the company's PDS services remains very strong, but capacity remains constrained as it needs adequate rate increases from payers in order to recruit and retain nurses.

RBC Capital analysts said they are not surprised to see the company reset expectations given the new CEO and multiple guide-downs during 2022. Demand remains robust and the company appears to be taking the appropriate steps with payers to increase rates and unlock capacity.