With a market cap of $14.2 billion, DaVita Inc. (DVA) is a leading provider of dialysis services in the United States, specializing in the treatment of patients with chronic kidney failure, also known as end-stage renal disease (ESRD). The company operates kidney dialysis centers and offers a range of related medical services, including outpatient and inpatient dialysis, laboratory testing, and disease management.
Shares of the dialysis specialist have outperformed the broader market over the past 52 weeks. DVA has climbed 58.2% over this time frame, while the broader S&P 500 Index ($SPX) has gained 20.7%. Moreover, DVA stock has risen 16.2% on a YTD basis, compared to SPX's 3.2% YTD gain.
Looking closer, the Denver, Colorado-based company has significantly outpaced the Health Care Select Sector SPDR Fund's (XLV) 1.4% rise over the past 52 weeks and a 6.2% YTD gain.
DaVita's stock dropped over 10% on Oct. 30 after reporting weaker-than-expected Q3 2024 adjusted EPS of $2.59, which was below the consensus estimate and marked a 9.1% year-over-year decline. While total revenue increased 4.6% to $3.3 billion, the company’s "Other revenues" segment saw a steep 26.2% decline to $125 million, and overall U.S. dialysis treatment volumes remained nearly flat. Additionally, DaVita’s free cash flow guidance for 2024 of $950 million to $1.2 billion suggested a possible decline compared to 2023, further dampening investor confidence.
For fiscal 2024, which ended in December, analysts expect DVA’s EPS to grow 14.6% year-over-year to $9.71. The company’s earnings surprise history is mixed. It beat the consensus estimates in three of the last four quarters while missing on another occasion.
Among the eight analysts covering the stock, the consensus rating is a “Hold.” That’s based on one “Strong Buy” rating, six “Holds,” and one “Moderate Sell.”
On Jun. 28, 2024, Barclays analyst Andrew Mok CFA, maintained a “Hold" rating on DaVita, with a price target of $150.
As of writing, DVA is trading above the mean price target of $166.28. The Street-high price target of $186 implies a modest potential upside of 7.1% from the current price levels.
On the date of publication, Sohini Mondal did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.More news from Barchart
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