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DaVita Inc DVA

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Stock XNYS Rating as of
$134.45 −7.79 (5.48%)
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As of Delayed Price Closed
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Company Report

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DaVita Earnings: Strong Start to 2024, but Cash Flow Prospects Unchanged

Julie Utterback

Narrow-moat DaVita turned in strong first-quarter results, and management mildly bumped up its bottom-line expectations, including recent share repurchases that we suspect were value-neutral for long-term shareholders. However, its free cash flow guidance hasn't changed. Since free cash flow is the main driver of our valuation methodology and our 2024 assumption for free cash flow remains within management's guidance range, we don't anticipate changing our $122 fair value estimate, at first glance.

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Price vs Fair Value

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DVA is trading at a 10% premium.
Price
$134.45
Fair Value
$591.00
Uncertainty
High
1-Star Price
$642.50
5-Star Price
$59.70
Economic Moat
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Capital Allocation
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Bulls Say, Bears Say

Bulls

Excluding recent COVID-19 mortality challenges and obesity drug expansion, the ESRD patient population may grow at a healthy rate in the U.S. and around the globe for the long run, which should benefit DaVita.

Bears

Potential U.S. healthcare policy changes could reduce industry profitability if insurance coverage shifts away from employer-based plans and if Medicare reimbursement rates aren't changed significantly.

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Trading Information

Previous Close Price
$142.24
Day Range
$131.27–145.04
52-Week Range
$71.51–145.04
Bid/Ask
$132.50 / $136.12
Market Cap
$11.79 Bil
Volume/Avg
2.5 Mil / 868,584

Key Statistics

Price/Earnings (Normalized)
14.65
Price/Sales
1.01
Dividend Yield (Trailing)
—
Dividend Yield (Forward)
—
Total Yield
5.51%

Company Profile

DaVita is the largest provider of dialysis services in the United States, boasting market share that eclipses 35% when measured by both patients and clinics. The firm operates over 3,000 facilities worldwide, mostly in the U.S., and treats over 240,000 patients globally each year. Government payers dominate U.S. dialysis reimbursement. DaVita receives about two thirds of U.S. sales at government (primarily Medicare) reimbursement rates, with the remainder coming from commercial insurers. However, while commercial insurers represented only about 10% of the U.S. patients treated, they represent nearly all of the profits generated by DaVita in the U.S. dialysis business.
Sector
Healthcare
Industry
Medical Care Facilities
Stock Style Box
Mid Core
Total Number of Employees
70,000
Website
https://www.davita.com

Competitors

Valuation

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Metric
DVA
THC
HCA
Price/Earnings (Normalized)
 14.6513.7015.82
Price/Book Value
 12.733.40—
Price/Sales
 1.010.601.26
Price/Cash Flow
 6.266.858.37
Price/Earnings
DVA
THC
HCA

Financial Strength

Metric
DVA
THC
HCA
Quick Ratio
 1.061.230.86
Current Ratio
 1.191.441.18
Interest Coverage
 3.955.814.98
Quick Ratio
DVA
THC
HCA

Profitability

Metric
DVA
THC
HCA
Return on Assets (Normalized)
 6.99%3.29%9.68%
Return on Equity (Normalized)
 118.17%50.21%—
Return on Invested Capital (Normalized)
 10.75%7.95%16.36%
Return on Assets
DVA
THC
HCA
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