DaVita Inc. Prepares for Earnings Release Amid Strong Stock Performance
DaVita Inc. (DVA), based in Denver, Colorado, is a prominent healthcare company focused on kidney care services, primarily offering dialysis treatments. With a market cap of $14.04 billion, DaVita provides care to hundreds of thousands of patients across the U.S. and around the globe. The company is scheduled to announce its Q3 earnings after the market closes on Tuesday, Oct. 29.
Analysts Predict Slight Decline in Q3 Earnings
In anticipation of the earnings announcement, analysts forecast that DVA will report a profit of $2.76 per share, which marks a 3.2% decline from $2.85 in the same quarter last year. DaVita has a history of exceeding Wall Street’s estimates, having beaten projections for four consecutive quarters.
In the previous quarter, the company recorded adjusted earnings of $2.59 per share, which was 4.9% above the consensus expectation. The growth in Q2 was attributed to seasonal patient increases and annual rate hikes.
Forecasting Growth for Fiscal 2024
Looking ahead to fiscal 2024, analysts anticipate DVA will report earnings per share of $9.99, reflecting an 18% increase compared to $8.47 in fiscal 2023.
Strong Year-to-Date Performance
DVA shares have increased by 52.8% year-to-date, substantially outpacing the broader S&P 500 Index, which has risen by 22.5%, and the SPDR S&P Health Care Services ETF (XHS), which has seen an 8.5% gain within the same period.
Mixed Analyst Opinions and Stock Valuation
During its Q2 earnings report on Aug. 6, DaVita announced a revenue increase of 6.2%, reaching $3.19 billion, surpassing expectations. However, the stock experienced a 2.2% dip amid concerns about delayed claims processing and the potential reduction in dialysis demand due to GLP-1 weight-loss drugs. Despite this setback, DVA rebounded in subsequent sessions, indicating investor optimism about the company’s favorable 2024 outlook.
Currently, the consensus on DVA stock is cautious, carrying an overall “Hold” rating. Out of eight analysts monitoring the stock, one recommends a “Strong Buy”, six suggest a “Hold”, and one promotes a “Moderate Buy.”
While DVA currently trades above the average analyst price target of $157.28, the highest target price of $175 implies a potential rally of nearly 9.3%.
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On the date of publication, Rashmi Kumari did not hold (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article are for informational purposes only. For more information, please refer to the Barchart Disclosure Policy here.
The views and opinions expressed herein are those of the author and do not necessarily reflect the views of Nasdaq, Inc.
