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DaVita Inc DVA

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Morningstar’s Analysis

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DaVita Boosts 2021 EPS Outlook After Solid First Quarter; Shares Mildly Rich

Julie Utterback, CFA Senior Equity Analyst

Analyst Note

| Julie Utterback, CFA |

Narrow-moat dialysis firm DaVita turned in first-quarter operating results that beat FactSet consensus on the bottom line, and the firm raised its adjusted EPS outlook for 2021. We are not changing our fair value estimate based on these trends, though, as our EPS and free cash flow estimates remain within management's new outlook ranges.

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Company Profile

Business Description

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 3,100 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 approximately 69% of U.S. sales at government (primarily Medicare) reimbursement rates, with the remaining 31% 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.

Contact
2000 16th Street
Denver, CO, 80202
T +1 720 631-2100
Sector Healthcare
Industry Medical Care Facilities
Most Recent Earnings Mar 31, 2021
Fiscal Year End Dec 31, 2021
Stock Type Slow Growth
Employees 67,000

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