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DaVita (DVA)
NYSE:DVA
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DaVita
(NYSE:DVA)62Neutral
Positive Factors
Potential Operating Income
Inclusion of oral phosphate binders is expected to provide a potential operating income benefit, with the midpoint considered most likely.
Stock Price Target
The price target for DaVita's stock has been increased to $165, reflecting confidence in future performance.
Negative Factors
Earnings Guidance
Management provided 2025 guidance including EBIT forecast below consensus and flat total treatment volume.
DaVita (DVA) vs. S&P 500 (SPY)
Market Cap
$11.83B
Dividend YieldN/A
Average Volume (3M)993.28K
Price to Earnings (P/E)13.3
Beta (1Y)0.82
Revenue Growth5.56%
EPS Growth45.02%
CountryUS
Employees76,000
SectorHealthcare
Sector Strength74
IndustryHealthcare Providers & Services
Share Statistics
EPS (TTM)10.74
Shares Outstanding80,000,000
10 Day Avg. Volume1,360,957
30 Day Avg. Volume993,279
Financial Highlights & Ratios
PEG Ratio0.30
Price to Book (P/B)N/A
Price to Sales (P/S)0.92
Price to Cash Flow (P/CF)5.40
P/FCF Ratio6.40
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$172.00Price Target Upside21.46% Upside
Rating ConsensusHold
Number of Analyst Covering4
DaVita Business Overview & Revenue Model
Company DescriptionDaVita, Inc. engages in the provision of medical care services. It operates through the following two segments: US Dialysis and Related Lab Services; and Other-Ancillary Services and Strategic Initiatives. The US Dialysis and Related Lab Services segment offers kidney dialysis services in the United States for patients suffering from chronic kidney failure. The Other-Ancillary Services and Strategic Initiatives segment consist primarily of pharmacy services, disease management services, vascular access services, clinical research programs, physician services, direct primary care, end stage renal disease seamless care organizations, and comprehensive care. The company was founded in 1994 and is headquartered in Denver, CO.
How the Company Makes MoneyDaVita Inc. generates revenue primarily through the provision of dialysis services. The company operates a widespread network of dialysis centers, where it provides in-center hemodialysis, home dialysis, and related laboratory services. Revenue is largely derived from payments made by government health programs such as Medicare and Medicaid, private health insurance, and direct payments from patients. Additionally, DaVita may engage in strategic partnerships with hospitals and healthcare systems to expand its service offerings and reach more patients. The company's financial performance is influenced by patient volume, reimbursement rates from insurers, and operational efficiency at its dialysis centers.
DaVita Financial Statement Overview
Summary
DaVita shows strong revenue growth and solid cash flow generation, but high leverage poses financial risks. Improved profitability is noted, though operational efficiency and debt reduction are key areas for improvement.Income Statement
DaVita has shown strong revenue growth over the years, increasing from $11.39 billion in 2019 to $12.82 billion in 2024, which represents a solid growth trajectory. The Gross Profit Margin has improved significantly, indicating better cost management. The Net Profit Margin has also improved, suggesting enhanced profitability. However, the EBIT and EBITDA margins have been relatively stable, indicating room for operational efficiency improvements.78
Positive
Balance Sheet
The balance sheet shows a high level of debt, with a Debt-to-Equity ratio rising over the years, standing at an elevated level in 2024. This high leverage poses some financial risk. The Return on Equity (ROE) is modest due to the small equity base, but it has shown improvement, reflecting better profitability. The Equity Ratio is low, indicating that the company is heavily financed by debt, which could be a concern in terms of financial stability.65
Positive
Cash Flow
DaVita's cash flow statement reflects strong operational cash flows that have been consistently positive, with Operating Cash Flow exceeding Net Income, indicating good cash conversion. Free Cash Flow growth has been healthy, showing the company's ability to generate cash after capital expenditures. This strong cash flow position supports the company's financial flexibility despite high leverage.82
Very Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 12.82B | 12.14B | 11.61B | 11.62B | 11.55B | Gross Profit |
| 12.82B | 3.82B | 3.40B | 3.65B | 3.56B | EBIT |
| 2.09B | 1.60B | 1.34B | 1.80B | 1.69B | EBITDA |
| 2.72B | 2.32B | 2.05B | 2.45B | 2.31B | Net Income Common Stockholders |
| 936.34M | 691.53M | 768.19M | 978.45M | 773.64M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 846.00M | 391.67M | 321.78M | 484.21M | 345.06M | Total Assets |
| 17.29B | 16.89B | 16.93B | 17.12B | 16.99B | Total Debt |
| 11.39B | 11.12B | 11.82B | 11.98B | 11.19B | Net Debt |
| 10.59B | 10.74B | 11.58B | 11.51B | 10.87B | Total Liabilities |
| 15.19B | 14.15B | 14.70B | 14.75B | 14.09B | Stockholders Equity |
| 121.12M | 1.06B | 712.33M | 755.51M | 1.38B |
| Cash Flow | Free Cash Flow | |||
| 1.47B | 1.49B | 961.14M | 1.29B | 1.30B | Operating Cash Flow |
| 2.02B | 2.06B | 1.56B | 1.93B | 1.98B | Investing Cash Flow |
| -771.43M | -771.80M | -630.35M | -784.73M | -825.37M | Financing Cash Flow |
| -816.94M | -1.17B | -1.12B | -1.08B | -1.85B |
DaVita Technical Analysis
Negative
141.61
Price Trends
159.66
Negative
158.55
Negative
152.48
Negative
Market Momentum
-6.40
Positive
30.05
Neutral
24.99
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For DVA, the sentiment is Negative. The current price of 141.61 is below the 20-day moving average (MA) of 158.11, below the 50-day MA of 159.66, and below the 200-day MA of 152.48, indicating a bearish trend. The MACD of -6.40 indicates Positive momentum. The RSI at 30.05 is Neutral, neither overbought nor oversold. The STOCH value of 24.99 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for DVA.
DaVita Risk Analysis
DaVita disclosed 26 risk factors in its most recent earnings report. DaVita reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
DaVita Peers Comparison
Overall Rating
UnderperformOutperform
Sector (49)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
74 Outperform | $11.39B | 10.42 | 16.92% | 0.46% | 10.82% | 65.64% | |
72 Outperform | $11.67B | 3.81 | 76.72% | ― | 0.57% | 440.71% | |
71 Outperform | $14.28B | 24.42 | 3.69% | 1.88% | -0.57% | 8.25% | |
65 Neutral | $77.50B | 14.18 | -230.22% | 0.85% | 8.67% | 15.32% | |
62 Neutral | $11.83B | 13.32 | 773.06% | ― | 5.56% | 45.02% | |
52 Neutral | $420.94M | ― | 39.18% | ― | 1.16% | -278.41% | |
49 Neutral | $7.05B | 0.34 | -55.09% | 2.46% | 25.27% | -3.43% |
* Healthcare Sector Average
Performance Comparison
DVA
DaVita
141.61
9.63
7.30%
CYH
Community Health
3.03
0.24
8.60%
FMS
Fresenius Medical Care
22.84
3.18
16.17%
HCA
HCA Healthcare
312.05
-8.84
-2.75%
THC
Tenet Healthcare
122.67
25.33
26.02%
UHS
Universal Health
173.30
-1.94
-1.11%
DaVita Earnings Call Summary
Earnings Call Date: Feb 13, 2025 | % Change Since: -20.02% | Next Earnings Date: May 13, 2025
Earnings Call Sentiment Neutral
While DaVita Inc. showed strong financial performance and pursued strategic growth initiatives such as the Latin America expansion and transitioning oral drugs, challenges with volume growth, disruptions caused by Hurricane Helene, and international income declines present significant concerns. The sentiment is balanced with achievements in certain areas and setbacks in others.Highlights
Strong Financial Performance
DaVita Inc. ended 2024 with adjusted operating income of $1.98 billion and adjusted EPS of $9.68, showing a year-over-year growth of 21% and 26% respectively. Free cash flow for the year was $1.16 billion.
Expansion in Latin America
Closed on three of the four acquisitions in Latin America, with the expansion in Brazil expected to close midyear 2025.
Oral Drugs Transition
Effective January 1, 2025, oral drugs transitioned from Medicare drug benefit to the dialysis benefit, potentially contributing $0 to $50 million in operating income.
Share Repurchase Program
Committed to returning capital to shareholders through share repurchases.
Lowlights
Volume Growth Challenges
Despite positive volume growth for the first time since the pandemic, the growth for the full year was below expectations. Mortality and mistreatment rates remained elevated, and new patient starts were negatively impacted by supply constraints.
Impact of Hurricane Helene
Hurricane Helene caused a disruption in PD supply, resulting in a loss of approximately 350 admissions and a $6 million impact on Q4 operating income.
International Operating Income Decline
Adjusted international operating income declined by $17 million, driven by a $19 million reserve recorded against aged accounts receivable in Brazil.
Flat Volume Growth Outlook for 2025
The midpoint of 2025 guidance assumes flat treatment volume growth compared to 2024, with specific headwinds associated with the number of treatment days and PD admissions.
Integrated Kidney Care Loss
IKC ended 2024 with a full-year adjusted operating loss of $35 million, though it was $15 million ahead of expectations.
Company Guidance
During the call, DaVita Inc. provided guidance for 2025, highlighting a projected adjusted operating income (OI) growth of 5.2% and adjusted earnings per share (EPS) growth of 11%. The guidance assumes flat treatment volume growth compared to 2024, with an anticipated revenue per treatment increase of 4.5% to 5.5%, driven partly by the inclusion of oral phosphate binders. Patient care costs are expected to rise by 6% to 7%, influenced by both the addition of oral medications and inflationary pressures. The company aims to maintain its capital allocation strategy, targeting leverage between three and 3.5 times EBITDA, and plans to return excess capital to shareholders through share repurchases. Free cash flow for 2025 is estimated to be between $1 billion and $1.25 billion. DaVita continues to pursue operational excellence and growth in integrated kidney care, with a focus on improving health outcomes and managing costs effectively.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.