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With a market cap of $13.5 billion, DaVita Inc. (DVA) is a leading provider of dialysis services in the U.S., specializing in the care of patients with chronic kidney failure or end-stage renal disease (ESRD). It operates kidney dialysis centers and offers a comprehensive range of services, including outpatient and inpatient dialysis, related laboratory testing, disease management, and integrated care solutions. The Denver, Colorado-based is expected to announce its fiscal Q4 earnings results on Tuesday, Feb. 11.
Ahead of this event, analysts expect the dialysis specialist to report a profit of $2.21 per share, up 18.2% from $1.87 per share in the year-ago quarter. The company has surpassed Wall Street's earnings estimates in three of the last four quarters while missing on another occasion. In Q3, DVA missed the consensus EPS estimate by 6.2%.
For fiscal 2024, DaVita is projected to report an EPS of $9.71, reflecting a 14.6% increase from $8.47 in fiscal 2023. Analysts anticipate continued growth in fiscal 2025, with EPS expected to rise 15.8% year-over-year to $11.24.
Shares of DVA have climbed 57.3% over the past 52 weeks, outperforming both the S&P 500 Index's ($SPX) 24.6% rise and the Health Care Select Sector SPDR Fund's (XLV) over 1% gain over the same period.
DaVita stock dropped 10.8% on Oct. 30 due to disappointing Q3 earnings results. While revenue grew to $3.3 billion, slightly exceeding analysts' expectations, adjusted EPS dropped to $2.59, missing the consensus. Management cited higher reimbursement rates and increased hospital inpatient dialysis treatments as drivers of the revenue growth but failed to offset the decline in profitability. Investors reacted negatively to the earnings miss and appeared concerned about the lack of robust top-line growth in a healthcare sector poised to benefit from an aging U.S. population.
Analysts' consensus view on DaVita’s stock is cautious, with a "Hold" rating overall. Among eight analysts covering the stock, one recommends "Strong Buy," six suggest "Hold," and one indicates “Moderate Sell.” As of writing, DVA is trading above the average analyst price target of $163.
