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Denver, Colorado-based DaVita Inc. (DVA) provides kidney dialysis services for patients suffering from chronic kidney failure in the United States. Valued at a market cap of almost $12.5 billion, the company also offers outpatient, hospital inpatient, and home-based hemodialysis services and operates clinical laboratories as well.
Companies worth $10 billion or more are generally described as “large-cap” stocks, and DaVita fits right into that category. The company is a leading provider of dialysis services and is renowned for treating patients with chronic kidney failure and end-stage renal disease (ESRD). It is also known for offering a variety of healthcare services, including integrated treatment plans, personalized care teams, and health management services.
The medical care facilities provider’s shares have slipped 9.7% from its 52-week high of $169.51, achieved on Nov. 27. It has fallen 5.3% over the past three months, still outpacing the broader Health Care Select Sector SPDR Fund’s (XLV) 10.1% decline over the same time frame.
Moreover, in the longer term, DVA has rallied 46.7% over the past 52 weeks, significantly surpassing XLV’s 2.8% returns. Over the past six months, shares of DVA are up 8.2%, outperforming XLV’s 5.5% decline over the same time frame.
While DVA has been trading below its 50-day moving average since early December, it has remained above its 200-day moving average since the past year.
Shares of DVA plunged 10.8% after its Q3 earnings release on Oct. 29 as its adjusted EPS decreased 9.1% year-over-year to $2.59 and missed the consensus estimates by 6.2%. A 26.2% annual fall in other revenues and the year-over-year decline in normalized non-acquired treatment might have further dampened investor confidence.
Nevertheless, a 6.3% growth in dialysis patient service revenues coupled with an increase in average reimbursement rates and other normal fluctuations led to a 4.6% annual uptick in revenues to $3.26 billion, which surpassed the forecasted figure by 1.2%.
DVA has outpaced its rival, Fresenius Medical Care AG’s (FMS) 8.6% rise over the past 52 weeks but has lagged behind FMS’s 16.9% increase on a six-month basis.
Despite DaVita’s recent outperformance relative to its broader sector, analysts remain cautious about its prospects. The stock has a consensus rating of “Hold” from the eight analysts covering it, and the mean price target of $163 suggests a modest 6.5% premium to its current levels.
