DaVita (DVA) AI Stock Analysis

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DaVita

(NYSE:DVA)

67Neutral

DaVita's overall score is driven by strong financial management and effective handling of operational challenges, such as a cybersecurity incident. The company's high leverage and negative equity are significant risks, but these are partially offset by robust cash flow and strategic capital allocation. While technical indicators show some bearish sentiment, the valuation remains reasonable. Positive earnings call insights and maintained guidance further bolster the outlook.

Positive Factors

Earnings Performance

Operating income for the first quarter was 5% better than expected, thanks to improved margins.

Revenue Growth

The transition of phosphate binders into the Medicare bundle has resulted in a higher benefit and is expected to contribute significantly to operating income.

Stock Price Target

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

Negative Factors

Operational Disruptions

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

Volume Recovery Challenges

There is low visibility into volume recovery, which is necessary for long-term operating income growth.

Weather Impact

Treatment growth guidance faces headwinds from severe weather events and the loss of a treatment day due to the leap year effect.

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

Market Cap

$10.98B

Dividend YieldN/A

Average Volume (3M)891.98K

Price to Earnings (P/E)14.4

Beta (1Y)0.54

Revenue Growth5.11%

EPS Growth14.28%

CountryUS

Employees76,000

SectorHealthcare

Sector Strength41

IndustryMedical - Care Facilities

Share Statistics

EPS (TTM)2.00

Shares Outstanding75,500,000

10 Day Avg. Volume916,259

30 Day Avg. Volume891,978

Financial Highlights & Ratios

PEG Ratio-2.18

Price to Book (P/B)-43.21

Price to Sales (P/S)0.00

P/FCF Ratio6.24

Enterprise Value/Market Cap2.08

Enterprise Value/Revenue0.45

Enterprise Value/Gross Profit5.43

Enterprise Value/Ebitda2.17

Forecast

1Y Price Target

$159.67

Price Target Upside9.81% Upside

Rating ConsensusHold

Number of Analyst Covering4

DaVita Business Overview & Revenue Model

Company DescriptionDaVita 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 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 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

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

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

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.

TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
12.97B	12.82B	12.14B	11.61B	11.62B	11.55B
	Gross Profit
4.21B	4.22B	3.82B	3.40B	3.65B	3.56B
	EBIT
2.05B	2.09B	1.60B	1.34B	1.80B	1.69B
	EBITDA
2.66B	2.72B	2.32B	2.05B	2.45B	2.31B
	Net Income Common Stockholders
859.61M	936.34M	691.53M	768.19M	978.45M	773.64M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
355.74M	846.00M	391.67M	321.78M	484.21M	345.06M
	Total Assets
17.43B	17.29B	16.89B	16.93B	17.12B	16.99B
	Total Debt
11.84B	12.07B	11.12B	11.82B	11.98B	11.19B
	Net Debt
11.50B	11.27B	10.74B	11.58B	11.51B	10.87B
	Total Liabilities
14.79B	15.19B	14.15B	14.70B	14.75B	14.09B
	Stockholders Equity
926.00M	121.12M	1.06B	712.33M	755.51M	1.38B
Cash Flow		Free Cash Flow
1.76B	1.47B	1.49B	961.14M	1.29B	1.30B
	Operating Cash Flow
2.34B	2.02B	2.06B	1.56B	1.93B	1.98B
	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 Price145.41

Price Trends

50DMA

145.83

Negative

100DMA

152.61

Negative

200DMA

153.83

Negative

Market Momentum

MACD

-0.59

Negative

RSI

53.46

Neutral

STOCH

61.31

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 145.41 is above the 20-day moving average (MA) of 141.23, below the 50-day MA of 145.83, and below the 200-day MA of 153.83, indicating a neutral trend. The MACD of -0.59 indicates Negative momentum. The RSI at 53.46 is Neutral, neither overbought nor oversold. The STOCH value of 61.31 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 (52)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
THC	78 Outperform	$15.37B	10.94	38.12%	―	-1.79%	-41.85%
FMS	77 Outperform	$16.86B	25.02	4.36%	1.54%	―	―
CHE	75 Outperform	$8.48B	28.25	26.11%	0.33%	8.52%	10.36%
UHS	73 Outperform	$12.75B	11.12	18.35%	0.40%	9.73%	51.87%
EHC	68 Neutral	$12.18B	24.95	25.33%	0.55%	11.21%	30.38%
DVA	67 Neutral	$10.98B	14.39	260.92%	―	5.11%	14.28%
Sector *	52 Neutral	$5.15B	3.02	-44.64%	2.83%	16.44%	-0.47%

* Healthcare Sector Average

Performance Comparison

DVA

DaVita

145.41

4.48

3.18%

CHE

Chemed

579.86

17.44

3.10%

FMS

Fresenius Medical Care

28.78

6.85

31.24%

EHC

Encompass Health

120.87

35.36

41.35%

THC

Tenet Healthcare

165.47

34.51

26.35%

UHS

Universal Health

197.94

17.26

9.55%

DaVita Earnings Call Summary

Earnings Call Date:May 12, 2025

(Q1-2025)

% Change Since: 0.68%|

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.

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.