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DaVita Inc. (DVA), headquartered in Denver, Colorado, provides kidney dialysis services for patients suffering from chronic kidney failure. Valued at $12 billion by market cap, the company operates kidney dialysis centers and provides related lab services in outpatient dialysis centers.
Companies worth $10 billion or more are generally described as “large-cap stocks,” and DVA perfectly fits that description, with its market cap exceeding this mark, underscoring its size, influence, and dominance within the medical care facilities industry. With over 35% market share in the U.S. dialysis market, DVA is a trusted leader known for quality care and innovation in kidney care. Its integrated approach offers services from diagnosis to transplant support, making it a comprehensive healthcare provider. Its focus on personalized care at scale has built strong patient trust and brand equity, solidifying its market dominance of over 25 years.
Despite its notable strength, DVA slipped 14.8% from its 52-week high of $179.60, achieved on Jan. 31. Over the past three months, DVA stock has declined marginally, underperforming the SPDR S&P Health Care Services ETF’s (XHS) 8% gains during the same time frame.
In the longer term, shares of DVA dipped 6.2% over the past six months, underperforming XHS’ six-month 1.9% gains. However, the stock climbed 10.8% over the past 52 weeks, outperforming XHS’ 3.5% returns over the last year.
To confirm the bearish trend, DVA has been trading below its 50-day and 200-day moving averages since mid-February, with slight fluctuations.
DVA is facing challenges due to limited supply availability and increasing patient care expenses. Elevated mortality and mistreatment rates are also impacting the growth of new patients. Another major hurdle is the decrease in patient volume, with the possibility of more center closures further impacting growth.
On Feb. 13, DVA reported its Q4 results, and its shares fell over 11% in the following trading session. The company’s revenue stood at $3.3 billion, up 4.7% year over year. Its adjusted EPS declined 13.5% quarter over quarter to $2.24.
In the competitive arena of medical care facilities, Fresenius Medical Care AG (FMS) has taken the lead over DVA, showing resilience with 29.2% gains over the past 52 weeks and a 16.9% uptick on a six-month basis.
Wall Street analysts are cautious on DVA’s prospects. The stock has a consensus “Hold” rating from the eight analysts covering it, and the mean price target of $169.14 suggests a potential upside of 10.6% from current price levels.
On the date of publication, Neha Panjwani did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
