DaVita (DVA) AI Stock Analysis

• Market Cap: $10.88B
• Dividend Yield: N/A
• Average Volume (3M): 839.98K
• Price to Earnings (P/E): 13.2
• Beta (1Y): 0.58
• Revenue Growth: 5.56%
• EPS Growth: 45.02%
• Country: US
• Employees: 76,000
• Sector: Healthcare
• Sector Strength: 74
• Industry: Medical - Care Facilities
• EPS (TTM): 10.74
• Shares Outstanding: 76,863,335
• 10 Day Avg. Volume: 835,994
• 30 Day Avg. Volume: 839,981
• PEG Ratio: 0.29
• Price to Book (P/B): N/A
• Price to Sales (P/S): 0.00
• Price to Cash Flow (P/CF): 0.00
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: 2.36
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: 2.00
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $172.00
• Price Target Upside: 22.47% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 4

DaVita's strong financial performance is a key strength, driven by revenue growth and robust cash flows. However, high leverage and operational challenges pose risks. The technical outlook is weak, with the stock showing bearish momentum. While valuation appears fair, the lack of dividend yield and earnings call highlights moderate growth amid challenges, impacting the overall score.

Positive Factors

Operational Income

Inclusion of oral phosphate binders is expected to provide a potential operating income benefit, with the midpoint considered most likely.

Stock Valuation

The price target for DaVita's stock has been increased to $165, reflecting confidence in future performance.

Negative Factors

Cybersecurity

A cyber incident has impacted some company operations and the duration or extent of the disruption is not yet known.

Earnings Guidance

Management provided 2025 guidance including EBIT forecast below consensus and flat total treatment volume.

DaVita Business Overview & Revenue Model

Company Description

DaVita Inc. provides kidney dialysis services for patients suffering from chronic kidney failure. The company operates kidney dialysis centers and provides related lab services in outpatient dialysis centers. It also provides outpatient, hospital inpatient, and home-based hemodialysis services; owns clinical laboratories that provide routine laboratory tests for dialysis and other physician-prescribed laboratory tests for ESRD patients; and management and administrative services to outpatient dialysis centers. In addition, the company provides disease management services to 16,000 patients in risk-based integrated care arrangements and 7,000 patients in other integrated care arrangements; vascular access services; clinical research programs; physician services; and comprehensive kidney care services. As of December 31, 2021, it provided dialysis and administrative services in the United States through a network of 2,815 outpatient dialysis centers serving approximately 203,100 patients; and operated 339 outpatient dialysis centers located in 10 countries outside of the United States serving approximately 39,900 patients. Further, the company provides acute inpatient dialysis services in approximately 850 hospitals and related laboratory services in the United States. The company was formerly known as DaVita HealthCare Partners Inc. and changed its name to DaVita Inc. in September 2016. DaVita Inc. was incorporated in 1994 and is headquartered in Denver, Colorado.

How the Company Makes Money

DaVita 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 cash flow generation, which bolsters its financial flexibility. However, high leverage and a modest ROE due to a small equity base present financial risks. Operational efficiency improvements and debt reduction are areas for potential enhancement.

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.

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.

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.

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

• Technical Analysis Sentiment: Negative
• Last Price: 140.44
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: 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 140.44 is below the 20-day moving average (MA) of 144.24, below the 50-day MA of 145.93, and below the 200-day MA of 153.62, indicating a bearish trend. The MACD of -2.72 indicates Positive momentum. The RSI at 42.99 is Neutral, neither overbought nor oversold. The STOCH value of 76.09 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for DVA.

DaVita Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
THC	78 Outperform	$11.78B	3.84	38.12%	―	-1.79%	-41.85%
UHS	76 Outperform	$11.43B	10.43	18.35%	0.45%	9.73%	51.87%
CHE	73 Outperform	$8.39B	27.95	26.11%	0.33%	8.52%	10.36%
FMS	72 Outperform	$14.76B	25.60	3.87%	1.75%	-0.57%	8.25%
EHC	70 Outperform	$11.71B	23.95	25.35%	0.55%	11.21%	30.49%
DVA	64 Neutral	$10.88B	13.17	159.08%	―	5.56%	45.02%
Sector *	52 Neutral	$5.28B	3.75	-42.72%	2.86%	17.70%	2.03%