Breaking Down Avalon Holdings Corporation (AWX) Financial Health: Key Insights for Investors

You're looking at Avalon Holdings Corporation (AWX) right now, and the numbers are giving you whiplash-honestly, they're a classic mixed signal, which means you need to dig deeper than the headline. In the third quarter of 2025, the company looked solid, pushing net operating revenues to $25.7 million and delivering a net income of $1.9 million, a slight bump from the year prior. But when you zoom out to the first nine months of 2025, the picture changes fast: total net operating revenues actually fell to $62.1 million from $66.2 million, and net income attributable to common shareholders plummeted from $1.8 million to just $0.7 million, translating to a basic earnings per share (EPS) of only $0.17. That's a massive drop, and it shows the real risk here isn't revenue-it's cost control and margin pressure, especially in the Waste Management segment where rising operational costs are defintely squeezing profitability. We need to map out how a company with $90.69 million in total assets navigates this inflationary environment and where the real opportunities lie in their diversified business model.

Revenue Analysis

You need to understand exactly where Avalon Holdings Corporation (AWX) makes its money, especially with the mixed signals from the latest reports. The direct takeaway is this: while the third quarter of 2025 showed a modest revenue increase, the overall nine-month trend is a decline, signaling core business headwinds that are squeezing margins.

Avalon Holdings Corporation's revenue is split almost evenly between two primary segments, with virtually all operations contained within the United States. In the third quarter of 2025, the company reported total net operating revenues of $25.7 million, a solid bump up from the $24.2 million reported in Q3 2024. That's a 6.20% year-over-year (YoY) increase, which looks good on the surface. But you have to look deeper.

Here's the quick math on the segment contribution for Q3 2025:

• Waste Management Services: This segment, which includes services to industrial, commercial, and governmental customers, brought in $12.9 million. That's about 50.2% of the total Q3 revenue.
• Golf and Related Operations: This segment, which covers membership dues, greens fees, food and beverage sales, and other resort activities, generated the remaining $12.8 million, or roughly 49.8%.

The company is defintely a tale of two segments, with an almost perfect 50/50 split in the quarter. One clean one-liner: Diversification is good, but both segments need to pull their weight.

Near-Term Revenue Trends and Risks

The real risk maps to the nine-month performance. For the first nine months of 2025, Avalon Holdings Corporation's net operating revenues were $62.1 million, which is a drop from the $66.2 million recorded in the same period in 2024. That's a -6.20% decline in the top line, which is a significant change you can't ignore. The Q3 increase did not fully offset the weakness from the first half of the year.

The biggest change we see is the margin pressure in the core business, Waste Management Services. While this segment's revenue grew by 12.2% in Q3 2025, its operating costs surged by 15.7% over the same period. This means the cost of generating that revenue is rising faster than the revenue itself, a classic margin squeeze that eats into profit. This is a common issue in the waste management sector right now, grappling with inflationary pressures (or what the industry calls rising operational costs).

To be fair, the Golf and Related Operations segment is providing a stable, seasonal counter-balance, but it won't be enough to offset deep-seated cost issues in the main business. The full picture of the revenue trajectory for the first nine months of 2025 compared to 2024 tells a story of contraction, despite the Q3 uptick.

If you're looking for more details on the company's profitability and valuation, you can check out the full analysis at Breaking Down Avalon Holdings Corporation (AWX) Financial Health: Key Insights for Investors. Your next step should be to monitor the Q4 2025 results for any sign that the nine-month revenue slide is reversing.

Profitability Metrics

You need to know if Avalon Holdings Corporation (AWX) is converting its revenue into real profit, and the simple answer is that its margins are defintely thin and under pressure in 2025. While the company is diversified (waste management and resorts), the profitability metrics based on the Trailing Twelve Months (TTM) ending June 30, 2025, show a struggle for meaningful net income.

For the TTM period ending mid-2025, Avalon Holdings Corporation generated $78.2 million in revenue, but most of that money was eaten up by costs. Here's the quick math on the core profitability ratios, which are essential for understanding a company's financial health:

• Gross Profit Margin: 19.96% ($15.61 million Gross Profit / $78.2 million Revenue).
• Operating Profit Margin: 2.22% ($1.74 million Operating Income / $78.2 million Revenue).
• Net Profit Margin: 0.15% ($0.12 million Net Income / $78.2 million Revenue).

A net margin of less than one-fifth of one percent is extremely low. It means that out of every dollar of sales, only about one-tenth of a cent actually makes it to the bottom line for shareholders. That leaves very little room for error.

Margin Trends and Industry Comparison

The trend in profitability for Avalon Holdings Corporation is worrying, especially when you look at the year-over-year comparison for the first nine months of 2025 (9M 2025). The company's net income attributable to common shareholders for 9M 2025 plummeted to approximately $0.7 million, a steep decline from the $1.8 million recorded in the first nine months of 2024. This is happening even as the third quarter of 2025 itself showed a modest net income increase to $1.9 million from $1.8 million in Q3 2024. The cumulative nine-month performance is the clearer indicator of pressure.

Comparing these figures to the industry average for waste management highlights a significant operational gap. The typical Gross Margin for a waste management company in 2025 is in the mid-30s to mid-40s, or 35% to 45%.

Operational Efficiency and Cost Management

The huge difference between Avalon Holdings Corporation's margins and the industry benchmarks points directly to operational efficiency issues, particularly cost management. The Gross Margin of 19.96% is less than half the low end of the industry average, suggesting that the cost of goods sold is disproportionately high relative to revenue.

In the waste management services segment, the core business, operating costs are clearly squeezing the company. In the third quarter of 2025, operating costs for this segment surged by 15.7% to $10.3 million, which outpaced the segment's revenue growth of 12.2% (revenue of $12.9 million). This is the classic sign of inflationary pressures-higher fuel, labor, and regulatory compliance costs-not being fully offset by price increases or operational improvements.

The company is struggling to pass on rising costs to customers, and that's a problem for long-term value creation. If you want to dive deeper into the full picture, you can read more here: Breaking Down Avalon Holdings Corporation (AWX) Financial Health: Key Insights for Investors. Finance: Model a 10% cost-of-revenue reduction scenario to see the margin impact by next week.

Debt vs. Equity Structure

You need a clear picture of how Avalon Holdings Corporation (AWX) funds its operations, and the data from the third quarter of 2025 shows a company that is moderately leveraged, especially when compared to its larger peers. The key takeaway is that AWX's debt-to-equity ratio sits at a manageable level, but its interest coverage is a near-term risk to watch.

Avalon Holdings Corporation's financial structure leans on a significant, but not excessive, amount of debt. As of the Q3 2025 results, the company reported total shareholders' equity of approximately $37.366 million. The primary component of its long-term financing is its non-current debt obligations.

Here's the quick math on the debt components from the Q3 2025 balance sheet:

• Long-term debt, net of current portion: $28.190 million
• Line of credit (drawn amount): $3.200 million

The total debt figure is close to $34.71 million as of September 2025, which gives us a clear number to work with. This level of debt is used to fund capital-intensive operations across its waste management and golf/resort segments. You can see more about what those operations are supporting here: Mission Statement, Vision, & Core Values of Avalon Holdings Corporation (AWX).

Debt-to-Equity and Industry Comparison

The Debt-to-Equity (D/E) ratio is the best metric for understanding financial leverage-it tells you how much debt the company uses for every dollar of equity. For Avalon Holdings Corporation, the trailing twelve months (TTM) D/E ratio is approximately 0.93, or 93%.

To be fair, for a capital-intensive sector like Environmental & Waste Services, a D/E ratio below 1.0 is generally considered healthy. However, the industry average for Environmental & Facilities Services sits a bit higher, around 1.14. Larger, more mature peers like Waste Management, Inc. operate with a much higher D/E ratio, at about 2.45 as of September 2025. This suggests Avalon Holdings Corporation is less leveraged than its biggest competitors, which reduces financial risk but could also mean they are not maximizing the use of cheap debt to accelerate growth.

The company is defintely managing its debt, not aggressively issuing more. For the period ending June 30, 2025, Avalon Holdings Corporation showed a net paydown of debt, with a Net Issuance of Debt of -$889k USD. Also, the company recently extended its existing line of credit with Wesbanco Bank, Inc., pushing the maturity date out to July 31, 2027, which is a smart move to secure financing terms and manage near-term liquidity. No major new debt issuances or credit ratings changes were reported in 2025, signaling a focus on stability and operational cash flow rather than large-scale, debt-fueled expansion.

What this estimate hides is the interest coverage. With an interest coverage ratio hovering around 0.89x, the company's earnings before interest and taxes (EBIT) are not fully covering its interest payments, which is a red flag in a rising-rate environment. This is a crucial risk that an investor must factor into their decision-making.

Next step: Analyze the company's cash flow statement to see if operating cash flow generation is sufficient to cover capital expenditures and interest payments without relying on new debt.

Liquidity and Solvency

The immediate takeaway for Avalon Holdings Corporation (AWX) is that its liquidity is tight, operating right at the margin of comfort. The company's short-term financial health is characterized by a current ratio of just over one, indicating a limited buffer to cover immediate obligations, but it's not defintely in distress.

When assessing a company's ability to cover its near-term debts, we look at the Current Ratio (Current Assets / Current Liabilities) and the Quick Ratio (Acid-Test Ratio). For Avalon Holdings Corporation (AWX), the Trailing Twelve Months (TTM) figures as of late 2025 tell a clear story:

• The Current Ratio is 1.01. This means for every dollar of current liability (debt due within one year), the company has $1.01 in current assets to cover it. That's technically solvent, but it's a very slim margin.
• The Quick Ratio is 0.90. This is the same test, but it strips out inventory, which is often the least liquid current asset. A figure below 1.0 shows the company would struggle to cover its short-term debt if it couldn't quickly sell its inventory. That's a red flag for a sudden cash crunch.

Working capital-the difference between current assets and current liabilities-is also razor-thin. Here's the quick math: the TTM working capital is only $275,000. For a company with total assets of over $88 million, that tiny figure shows a constant need for careful cash management. Any unexpected delay in collecting receivables or a sudden increase in accounts payable could flip that number negative, forcing the company to draw on its line of credit or delay payments.

Understanding the flow of cash over the last year is crucial, especially when liquidity is tight. The Cash Flow Statement for the 2025 fiscal year shows a mixed picture:

The positive Operating Cash Flow of $3.03 million is a major strength. It confirms the core business is generating cash, not burning it. However, after accounting for the $1.83 million in capital expenditures, the free cash flow is positive but small. This small free cash flow, combined with the low working capital, points to the primary liquidity concern: Avalon Holdings Corporation (AWX) has a TTM net cash position of -$30.10 million. This net negative cash position (cash minus total debt) means the company is structurally reliant on debt, which is a long-term solvency issue that feeds into short-term liquidity risk. You can read more about the company's full financial landscape here: Breaking Down Avalon Holdings Corporation (AWX) Financial Health: Key Insights for Investors.

Valuation Analysis

You're looking at Avalon Holdings Corporation (AWX) and asking the core question: is the stock priced right? My analysis suggests a mixed picture, but the low Price-to-Book (P/B) ratio signals a potential deep-value opportunity, especially when factoring in the lack of analyst coverage.

The stock is currently trading around the $2.98 mark as of mid-November 2025, but it has been a tough year, with the price decreasing by 12.69% over the last 12 months. Still, the recent technical analysis shows a positive short-term trend, upgrading it to a Strong Buy Candidate as of November 14, 2025.

Is Avalon Holdings Corporation (AWX) Overvalued or Undervalued?

To figure this out, we need to look past the headline price and into the core valuation multiples. Here's the quick math on the Trailing Twelve Months (TTM) data, which is crucial for a diversified company like Avalon Holdings Corporation (AWX). The market cap is small, around $11.35 million, so volatility is defintely a factor.

The valuation ratios offer a split view:

• Price-to-Book (P/B) Ratio: At just 0.30, this is the most compelling metric. A P/B below 1.0 suggests the stock is trading for less than the value of its net assets (assets minus liabilities), which is a classic sign of a deeply undervalued stock.
• Enterprise Value-to-EBITDA (EV/EBITDA): The ratio stands at 7.41. Compared to the broader market, this is a reasonable multiple, suggesting the company's operating cash flow is not overly expensive relative to its total value (market cap plus debt, minus cash).
• Price-to-Earnings (P/E) Ratio: This is where the picture gets murky. Some data points to a P/E of 11.28, which is inexpensive compared to the market average of about 38.44. However, another view places it at a high 87.7x when compared to the US Commercial Services industry average of 22.7x, indicating it is expensive relative to peers. This disparity often happens with small-cap companies having low net income, so look closely at the TTM earnings of $0.12 million as of June 2025.

What this estimate hides is the company's recent performance: net operating revenues for the first nine months of 2025 were $62.1 million, down from the prior year, and net income was only about $0.7 million for the same period. The low P/B is a signal, but the P/E volatility tells you the market is uncertain about future earnings growth.

Stock Performance and Analyst View

The stock's 52-week trading range, from a low of $2.10 to a high of $5.25, shows significant price volatility. This is typical for a micro-cap stock. The recent price action has been positive, with a rise of 8.76% over the two weeks leading up to mid-November 2025.

Regarding income distribution, Avalon Holdings Corporation (AWX) does not currently pay a dividend, so there is no dividend yield or payout ratio to analyze.

The critical factor here is the lack of institutional coverage. The official analyst consensus is simply 'N/A' because 0 analysts cover the stock. This means there is no formal 'buy, hold, or sell' rating from major Wall Street firms. You have to do the work yourself, which is often where the real opportunity lies in the small-cap world.

For a deeper dive into who is currently investing in this stock and their motivations, you should check out Exploring Avalon Holdings Corporation (AWX) Investor Profile: Who's Buying and Why?

Next step: Finance should perform a discounted cash flow (DCF) analysis using a conservative long-term growth rate of 2% to see if the P/B ratio holds up as a fair value indicator.

Risk Factors

You're looking at Avalon Holdings Corporation (AWX), a company with a split personality-waste management and golf resorts-and that diversification is both a strength and a source of risk. The direct takeaway is that while the waste segment is growing revenue, rising costs and litigation around a key asset are squeezing overall profitability, making the near-term financial picture murky.

The biggest internal financial risk right now is a liquidity crunch. Here's the quick math: Avalon Holdings Corporation's current ratio sits at a tight 0.77 as of late 2025. That means for every dollar of short-term debt, the company only has 77 cents in easily convertible assets to cover it. That's not a comfortable cushion, and it suggests a potential struggle to meet short-term financial commitments as they come due.

Operational and Financial Headwinds

The operational risks are clear and present, especially in the waste management segment, which accounts for approximately 55% of net operating revenues. We saw Q3 2025 net operating revenues for the company rise to $25.7 million, but the waste segment's operating costs surged to $10.3 million in Q3 2025, compared to $8.9 million in the prior-year period. That 15.7% cost increase is outpacing the revenue growth, which is a major margin squeeze. Honestly, they need to find a way to get ahead of rising fuel and labor expenses.

• Waste segment costs surged 15.7% in Q3 2025.
• Golf operations face high seasonality risk due to weather.
• Nine-month 2025 net income plummeted to $0.7 million.

The financial impact of these pressures is visible in the nine-month 2025 results: total net operating revenues of $62.1 million fell short of the $66.2 million recorded in the same period in 2024, and net income plummeted to approximately $0.7 million from $1.8 million year-over-year. That's a defintely worrying drop in profitability.

External Risks and Strategic Challenges

From an external perspective, Avalon Holdings Corporation faces significant regulatory and market risks. The most acute strategic challenge is the ongoing legal battle to resume saltwater injection well operations, which were suspended due to seismic activity concerns. This is a critical asset, and its continued suspension impacts the waste management segment's capacity and revenue stream. Plus, the golf and related operations segment (about 45% of revenue) is highly dependent on favorable weather in northeast Ohio and western Pennsylvania, making it susceptible to climate volatility and seasonality.

Here's a snapshot of the key risks and their impact:

What this estimate hides is the potential for a favorable legal ruling on the injection wells, which would instantly mitigate a major strategic risk. Their stated mitigation strategy for cybersecurity is a multilayered approach, and they are engaged in legal actions to get the wells back online. But until that happens, the operational and financial risks are elevated. You need to watch the next earnings report for any sign of a sustained reversal in the cost-of-revenue trend. For a deeper dive into the valuation and growth prospects, you can read the full post: Breaking Down Avalon Holdings Corporation (AWX) Financial Health: Key Insights for Investors.

Growth Opportunities

You're looking for a clear path forward with Avalon Holdings Corporation (AWX), and the picture is one of asset-driven stability but with a clear need for aggressive cost innovation. While the company is not a high-growth tech stock, its future hinges on optimizing its core assets and managing inflationary pressures, especially in the environmental services sector.

The core of Avalon Holdings Corporation's growth potential rests on its integrated waste services segment, which remains its largest revenue driver. For the first nine months of 2025, total net operating revenues were $62.1 million, a dip from the prior year, but the company's trailing twelve months (TTM) revenue ending September 30, 2025, still stands at a solid $79.71 million. The challenge is that operating costs are rising faster than revenue in the waste segment, a trend you defintely need to watch.

Here's the quick math: In Q3 2025, the waste management segment's revenue grew by 12.2%, but its operating costs surged by 15.7%, squeezing margins. This cost volatility is the near-term risk. The opportunity is in their capital allocation, with approximately $1.4 million in capital expenditures over the first nine months of 2025, suggesting investments in infrastructure or automation to eventually counter these rising costs.

Avalon Holdings Corporation's competitive advantages are structural, not just operational. These strengths position them for modest, stable growth, provided they execute on cost control:

• Integrated Waste Services: Owning and operating landfills gives them a massive advantage in controlling disposal costs and guaranteeing capacity, which is a key factor in winning long-term municipal and industrial contracts.
• Regional Market Density: Their deep operational concentration in specific areas like Northeastern Ohio and Western Pennsylvania drives route efficiency and strong local brand loyalty.
• Diversified Asset Base: The company balances industrial services with leisure and hospitality, owning premier golf properties and country clubs, which offers revenue diversification and a hedge against a purely industrial downturn.

To be fair, the company's net income for the first nine months of 2025 was only $0.7 million, down from $1.8 million in the same period in 2024, showing the real impact of these cost headwinds. The focus isn't on massive top-line expansion right now; it's on profit resilience.

The strategic initiatives are centered on prudent management and asset optimization, rather than big-ticket acquisitions or product innovations. Investors should look for updates on how their capital investments are translating into tangible cost savings and improved operational efficiency. The market is waiting for a clear signal on their digital transformation strategy to match larger peers in the waste sector.

You can find a deeper dive into the company's financial stability in the full post: Breaking Down Avalon Holdings Corporation (AWX) Financial Health: Key Insights for Investors.

For a clearer view of the segment performance, look at the Q3 2025 breakdown:

The next action is clear: Finance needs to model a scenario where waste management operating costs continue to rise at a 15% annual rate to stress-test the company's current pricing power and margin outlook.