Aveanna Healthcare Holdings (Nasdaq: AVAH) is putting home health and hospice at the forefront of its growth sights in 2025 through a mix of strategic approaches.

Aveanna has seen consecutive periods of growth in its home health and hospice business line. The company anticipates positive trends in financial and clinical outcomes to continue in the next year, according to Aveanna CEO Jeff Shaner.

Organic hospice and home health growth will play a large role in its strategy, Shaner indicated.

“We’re in a growth-focused area in our home health and hospice team,” Shaner said in an earnings call on Thursday. “We’re really bullish on our team’s ability to get to a 2% to 3% year-over-year organic growth rate in home health and hospice. We’re going to stay focused on organic growth with our home health and hospice team.”

Atlanta-headquartered Aveanna’s geographic footprint spans 34 states. The company provides adult and pediatric health care including home health, hospice, private duty nursing and medical solutions, among other services. Its revenue reached $519.9 million during the fourth quarter, an 8.6% year-over-year increase.

Factors fueling its growth included a $38.7 million bump in private duty revenue and a $2.0 million rise in medical solutions dollars. Additionally, the company’s home health and hospice revenues reached $54.4 million in Q4, a $0.3 million year-over-year increase.

The growth was offset in part by a $0.8 million decline across its home health and hospice segment for the Fiscal Year (FY) 2024. The segment experienced some “noise and turbulence” related to a transitional growth period of its hospice and home health sales teams, Shaner stated. Aveanna anticipates referral streams to improve this year with stronger recruitment and retention across its sales and clinical teams.

Aveanna’s home health and hospice segments “underperformed,” according to Scott Fidel, analyst at Stephens. The company is projected to see improvement in 2025, in part fueled by a promising, yet competitive/challenging hospice and home health merger and acquisition (M&A) landscape, Fidel indicated.

“Future growth strategy [is] dependent on favorable M&A prospects in [the home health and hospice (HH&H)] market,” Fidel said in a report shared with Hospice News. “[Aveanna’s (AVAH)] growth strategy will be heavily focused on pursuing accretive acquisitions in the home health and hospice market. There are a number of other established companies pursuing a similar strategy. This could limit the number of available targets and/or lead to higher acquisition multiples for AVAH vs. current expectations.”

Aveanna’s adjusted EBITDA for Q4 was $55.2 million, a 42.8% increase compared to the prior year’s period. The company brought in more than $2 billion in the FY 2024, with its overall performance “exceeding expectations,” Shaner said in a statement.

Aveanna’s strategic focus will include expansion of its home health and hospice business, mainly through organic growth and tuck-ins across its existing geographic markets on the near horizon, according to Shaner.

Acquisitions could make up a larger portion of its overall strategy in coming years, he added. The company has been less active on the M&A front in recent years, taking a cautious approach to growth, Shaner previously indicated.

“Think of us as being a tuck-in oriented acquirer in 2025 and 2026” Shaner said during Thursday’s earnings call. “We do expect to be back in the acquisition business in Fiscal Year 2025, so more to come as the year plays out.”

The ability to recruit and retain a sufficient workforce will be pivotal to the home health and hospice provider’s reach during a time of rising demand, said Matt Buckhalter, CFO and principal financial officer at Aveanna.

Like many providers nationwide, Aveanna has seen labor strains across its clinical workforce impacted by staffing shortages exacerbated by the pandemic. The last year has come with “solid signs of recovery,” in its home health and hospice segment, in part driven by the company’s strategic initiatives with preferred payors, among other factors, Buckhalter indicated.

“We continue to fight through a difficult labor environment while keeping our patients at the center of everything we do,” Buckhalter said during the earnings call. “It’s clear to us that shifting caregiver capacity to those preferred pacers who value our partnership is a path forward.”