DaVita Inc. Faces Mixed Financial Signals Amidst Market Fluctuations

Denver’s DaVita Inc. (DVA) provides essential kidney dialysis services for patients with chronic kidney failure across the United States. The company boasts a market capitalization nearing $12.5 billion, alongside offering various services: outpatient, hospital inpatient, home-based hemodialysis, and clinical laboratory operations.

Understanding DaVita’s Market Position

DaVita qualifies as a “large-cap” stock, a designation for companies valued at $10 billion or more. As a notable dialysis service provider, it is recognized for treating chronic kidney failure and end-stage renal disease (ESRD). The company’s offerings extend to integrated treatment plans, tailored care teams, and health management services.

Recent Stock Performance Overview

Shares of DaVita have fallen by 9.7% since reaching a 52-week high of $169.51 on November 27. The stock has declined 5.3% over the past three months, yet this performance is slightly better than the 10.1% dip seen in the broader Health Care Select Sector SPDR Fund (XLV).

Over the longer term, however, DVA shares have appreciated 46.7% in the past year, notably outperforming XLV’s modest 2.8% returns. In a six-month timeframe, DVA has increased by 8.2%, again outshining the 5.5% decline of XLV.

Technical Analysis and Moving Averages

Although DVA has struggled to stay above its 50-day moving average since early December, it has consistently remained above its 200-day moving average for over a year.

Quarterly Earnings Update

Shares tumbled 10.8% following the Q3 earnings release on October 29 when DaVita reported an adjusted EPS of $2.59—a 9.1% decline year-over-year that fell short of analysts’ expectations by 6.2%. Contributing to investor apprehension were a 26.2% drop in other revenue streams and a year-over-year decrease in normalized non-acquired treatment.

Despite this, DaVita experienced a 6.3% revenue growth in dialysis patient services, and overall revenues climbed 4.6% year-over-year to $3.26 billion, exceeding forecast figures by 1.2% due to increased reimbursement rates and other factors.

Comparison with Competitors

In the competitive landscape, DVA’s performance has outmatched its rival Fresenius Medical Care AG (FMS), which rose 8.6% over the past 52 weeks. However, FMS has outperformed DVA in the last six months with a 16.9% increase.

Analysts’ Outlook

While DaVita’s recent performance has been relatively strong, analysts express caution regarding its future. Currently, the stock holds a consensus rating of “Hold” from eight analysts, with a mean price target of $163, indicating a potential 6.5% upside from its current value.

On the date of publication, Neharika Jain did not hold positions in any of the securities mentioned in this article. All data presented here is for informational purposes. For more details, please visit the Barchart Disclosure Policy.

The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.