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DaVita (DVA)
NYSE:DVA

DaVita (DVA) AI Stock Analysis

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DaVita

(NYSE:DVA)

Rating:64Neutral
Price Target:
$150.00
▲(8.77%Upside)
DaVita's overall stock score is influenced primarily by its strong financial performance, particularly robust cash flow, and strategic corporate events aimed at financial flexibility. However, high financial leverage poses a risk, and technical indicators suggest potential bearish trends. The balanced earnings call with both achievements and challenges further supports a moderate score.
Positive Factors
Financial Performance
Operating income for the first quarter was 5% better than expected, thanks to improved margins.
Future Outlook
The price target for DaVita's stock has been increased to $165, reflecting confidence in future performance.
Product Contribution
The transition of phosphate binders into the Medicare bundle has resulted in a higher benefit and is expected to contribute significantly to operating income.
Negative Factors
External Impacts
Severe flu season and winter storms led to a decline in treatments and negatively impacted the overall volumes.
Operational Challenges
Expectations of lower treatment volumes and lost admissions due to a cyber incident are impacting forecasts.
Volume Recovery
There is low visibility into volume recovery, which is necessary for long-term operating income growth.

DaVita (DVA) vs. SPDR S&P 500 ETF (SPY)

DaVita Business Overview & Revenue Model

Company DescriptionDaVita Inc. is a leading healthcare company specializing in kidney care services, primarily focused on delivering dialysis treatments to patients with chronic kidney failure and end-stage renal disease. Operating across the United States and in select international markets, DaVita offers a comprehensive range of services including in-center hemodialysis, home dialysis, and integrated care management. The company is committed to improving the quality of life for patients through innovative technologies, personalized care plans, and a patient-centric approach.
How the Company Makes MoneyDaVita Inc. generates revenue primarily through providing dialysis services to patients with chronic kidney failure and end-stage renal disease. The company earns money from various sources including reimbursements from government programs such as Medicare and Medicaid, as well as payments from private insurance providers and direct payments from patients. A significant portion of DaVita's revenue comes from government healthcare programs, given the high cost of dialysis treatment and the chronic nature of kidney disease. The company also benefits from partnerships with hospitals and physician groups, expanding its reach and enhancing service delivery. Additionally, DaVita invests in developing home dialysis programs and integrated care services, which contribute to its revenue by offering more flexible and comprehensive care solutions to patients.

DaVita Earnings Call Summary

Earnings Call Date:May 12, 2025
(Q1-2025)
|
% Change Since: -4.52%|
Next Earnings Date:Jul 31, 2025
Earnings Call Sentiment Neutral
The earnings call presented a balanced view with significant achievements in managing a cybersecurity incident and positive contributions from phosphate binders, but also highlighted challenges in treatment volumes and ongoing costs related to the cyber incident.
Q1-2025 Updates
Positive Updates
Successful Cybersecurity Incident Management
Despite a significant cybersecurity incident that disrupted operations, DaVita managed to provide uninterrupted dialysis care and restored most functions quickly, demonstrating strong IT infrastructure and team responsiveness.
Positive Impact from Phosphate Binders
The transition of phosphate binders into the dialysis benefit resulted in revenue per treatment increasing by $10, contributing positively to operating income. The full-year operating income contribution from phosphate binders is expected to be at the upper end of the $0 to $50 million range.
Strong Capital Allocation and Share Repurchase
DaVita repurchased approximately $680 million of stock at an accelerated pace, indicating confidence in their capital allocation strategy.
Strong Performance in International Segment
International operations saw a $29 million increase in operating income versus the previous quarter, with additional gains expected throughout the year.
Successful Community Health Initiative
DaVita's partnership with the YMCA has successfully screened 30% of participants with previously undiagnosed CKD, showcasing meaningful community impact.
Negative Updates
Impact of Cybersecurity Incident and Flu on Volume
The cybersecurity incident and a severe flu season contributed to a 50 basis point decline in treatment volume expectations for the year.
Negative Free Cash Flow
The first quarter saw a negative free cash flow of $45 million, indicating potential liquidity challenges.
Challenges in Dialysis Treatment Volume
US treatments per day declined by 40 basis points versus the previous year, influenced by flu-related mortality and storm impacts.
Ongoing Legal and Regulatory Costs from Cyber Incident
There will be regulatory and legal follow-ups related to the cybersecurity incident, with costs expected to be recognized in the second quarter.
Company Guidance
During DaVita's first quarter 2025 earnings call, the company provided guidance indicating that adjusted operating income and adjusted earnings per share slightly exceeded expectations, driven by factors such as strong expense management and profitability from phosphate binders. Despite facing challenges like a cybersecurity incident and a high flu season, DaVita maintained its full-year guidance, expecting a 50 basis point decline in treatment volume. The transition of phosphate binders into the dialysis benefit is expected to contribute up to $50 million in operating income. Additionally, DaVita's capital allocation strategy remains focused on investing in high-return growth opportunities, with $680 million in stock repurchases since the last earnings call. The company also addressed policy topics such as tariffs, Medicaid, and premium tax credits, stating that these are not expected to have a material financial impact.

DaVita Financial Statement Overview

Summary
DaVita demonstrates strong revenue growth and efficient cash flow management, which are its key strengths. However, the high leverage and negative equity present risks that could affect future financial flexibility and stability. Continued focus on profitability and debt management will be critical for sustaining growth and reducing financial risk.
Income Statement
68
Positive
DaVita shows consistent revenue growth with a steady increase in revenue from $11.6 billion in 2022 to $12.97 billion in TTM 2025. The gross profit margin remains healthy at approximately 32.5% for TTM 2025, although net profit margin has slightly decreased from 7.3% in 2024 to 6.6% in TTM 2025, indicating some pressure on profitability. EBIT and EBITDA margins are strong, indicating effective operational management.
Balance Sheet
52
Neutral
DaVita's balance sheet reveals a high debt-to-equity ratio due to negative stockholders' equity in TTM 2025. This reflects a highly leveraged position, increasing financial risk. The equity ratio is negative, suggesting liabilities exceed assets, which could be concerning for long-term stability. However, the company maintains significant assets, suggesting potential resilience.
Cash Flow
75
Positive
The company's cash flow is robust with operating cash flow significantly exceeding net income, highlighting strong cash generation. Free cash flow has grown consistently, evidenced by a 19.9% increase from 2024 to TTM 2025, showcasing effective capital expenditure management.
Breakdown
TTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income StatementTotal Revenue
12.97B12.82B12.14B11.61B11.62B11.55B
Gross Profit
4.21B4.22B3.82B3.40B3.65B3.56B
EBIT
2.05B2.09B1.60B1.34B1.80B1.69B
EBITDA
2.66B2.72B2.32B2.05B2.45B2.31B
Net Income Common Stockholders
859.61M936.34M691.53M768.19M978.45M773.64M
Balance SheetCash, Cash Equivalents and Short-Term Investments
355.74M846.00M391.67M321.78M484.21M345.06M
Total Assets
17.43B17.29B16.89B16.93B17.12B16.99B
Total Debt
11.84B12.07B11.12B11.82B11.98B11.19B
Net Debt
11.50B11.27B10.74B11.58B11.51B10.87B
Total Liabilities
14.79B15.19B14.15B14.70B14.75B14.09B
Stockholders Equity
926.00M121.12M1.06B712.33M755.51M1.38B
Cash FlowFree Cash Flow
1.76B1.47B1.49B961.14M1.29B1.30B
Operating Cash Flow
2.34B2.02B2.06B1.56B1.93B1.98B
Investing Cash Flow
-718.36M-771.43M-771.80M-630.35M-784.73M-825.37M
Financing Cash Flow
-1.52B-816.94M-1.17B-1.12B-1.08B-1.85B

DaVita Technical Analysis

Technical Analysis Sentiment
Neutral
Last Price137.90
Price Trends
50DMA
143.22
Negative
100DMA
150.61
Negative
200DMA
153.58
Negative
Market Momentum
MACD
-1.89
Positive
RSI
44.41
Neutral
STOCH
62.07
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For DVA, the sentiment is Neutral. The current price of 137.9 is below the 20-day moving average (MA) of 140.06, below the 50-day MA of 143.22, and below the 200-day MA of 153.58, indicating a bearish trend. The MACD of -1.89 indicates Positive momentum. The RSI at 44.41 is Neutral, neither overbought nor oversold. The STOCH value of 62.07 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral 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 (54)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
FMFMS
77
Outperform
$16.73B25.024.36%2.02%
CHCHE
75
Outperform
$8.22B27.3226.11%0.36%8.52%10.36%
THTHC
71
Outperform
$15.78B11.3638.12%-1.79%-41.85%
UHUHS
70
Outperform
$12.15B10.6218.35%0.42%9.73%51.87%
EHEHC
68
Neutral
$12.22B25.0425.33%0.54%11.21%30.38%
DVDVA
64
Neutral
$10.32B13.63260.92%5.11%14.28%
54
Neutral
$5.24B3.27-45.39%2.80%16.77%-0.07%
* Healthcare Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
DVA
DaVita
137.90
-5.28
-3.69%
CHE
Chemed
562.41
20.68
3.82%
FMS
Fresenius Medical Care
28.51
7.58
36.22%
EHC
Encompass Health
121.54
37.28
44.24%
THC
Tenet Healthcare
171.46
37.73
28.21%
UHS
Universal Health
189.39
2.61
1.40%

DaVita Corporate Events

Private Placements and Financing
DaVita Completes $1 Billion Senior Notes Offering
Neutral
May 23, 2025

On May 23, 2025, DaVita Inc. completed a private offering of $1.0 billion in 6.750% Senior Notes due 2033. The company received approximately $986 million in net proceeds, which it plans to use primarily to repay $830 million in outstanding credit facility borrowings and cover associated costs, with the remainder allocated for general corporate purposes. The notes are unsecured senior obligations and come with specific covenants and redemption options, but they are not registered under the Securities Act and will not be listed on any securities exchange.

The most recent analyst rating on (DVA) stock is a Hold with a $145.00 price target. To see the full list of analyst forecasts on DaVita stock, see the DVA Stock Forecast page.

Private Placements and FinancingBusiness Operations and Strategy
DaVita Upsizes Private Offering to $1 Billion
Positive
May 20, 2025

On May 20, 2025, DaVita Inc. announced the upsize and pricing of its private offering of 6.750% senior notes due 2033, increasing the aggregate principal amount from $750 million to $1 billion. The proceeds from this offering are intended to repay outstanding credit facility borrowings and cover related expenses, with any remaining funds used for general corporate purposes. This strategic financial move is expected to close on May 23, 2025, and aims to strengthen DaVita’s financial position and operational flexibility.

The most recent analyst rating on (DVA) stock is a Sell with a $145.00 price target. To see the full list of analyst forecasts on DaVita stock, see the DVA Stock Forecast page.

Private Placements and FinancingBusiness Operations and Strategy
DaVita Announces $750M Senior Notes Offering
Positive
May 20, 2025

On May 20, 2025, DaVita Inc. announced the initiation of a private offering of $750 million in senior notes due in 2033, with proceeds intended to repay existing credit facilities and cover associated costs, with any remaining funds allocated for general corporate purposes. This strategic financial move is designed to strengthen DaVita’s financial position, potentially impacting its operations and industry standing, while also reflecting its ongoing commitment to financial flexibility and growth.

The most recent analyst rating on (DVA) stock is a Sell with a $145.00 price target. To see the full list of analyst forecasts on DaVita stock, see the DVA Stock Forecast page.

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.