Key Stats for DaVita Stock
- Price Change: -5.6%
- Current Price: ~$141
- Advanced Model Target: $207
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What Happened?
Shares of DaVita Inc. (DVA) fell 5.6% to close near $141 on Friday, succumbing to profit-taking despite the company delivering a strong fourth-quarter performance.
While the dialysis giant reported adjusted EPS of $3.40 (beating the $3.24 expected) and revenue of $3.62 billion, the market focused on external selling pressure.
A primary reason for the drop was the news that Berkshire Hathaway sold 1.7 million shares, reducing its stake and signaling to some investors that the stock’s recent 30% run-up may have peaked.
Additionally, traders expressed caution over “reimbursement risk,” specifically the $40 million headwind expected in 2026 from the expiration of enhanced premium tax credits for exchange plans.
The company’s Integrated Kidney Care (IKC) segment achieved its first profitable year in 2025, a major milestone that analysts believe will drive margin expansion going forward.
Analysts at Barclays raised their price target to $158, noting that while volume growth remains flat, the company’s ability to control costs and generate cash is improving.
This disconnect between the “cash out” mentality of traders and the improving fundamentals has created a potential entry point for long-term investors.
See analysts’ growth forecasts and price targets for DaVita stock (It’s free!) >>>
Is DaVita Undervalued Today?
During the earnings call, CEO Javier Rodriguez highlighted the success of their strategic shift toward value-based care.
He stated: “We’ve proven there’s a viable business model that is good for our patients… Building from this 2025 benchmark, we expect to deliver an incremental $20 million of IKC operating income growth in 2026.”
Rodriguez emphasized that the improved clinical outcomes in their IKC programs, such as lower hospitalization rates, are directly translating into financial performance.
To reinforce his confidence in the clinical impact, he added: “We have a powerful alignment between our clinical ambitions and our financial goals. By fulfilling our mission to deliver the best care for our patients, we can also deliver returns for our shareholders.”
CFO Joel Ackerman also noted that despite the tax credit headwinds, the company is effectively offsetting risks through the elimination of prior cybersecurity costs.
Read the full DaVita Transcript on TIKR to see the 2026 Outlook >>>
According to TIKR’s Advanced Valuation Model, the stock is now trading significantly below its intrinsic value.
- Target Price: $207.63
- Current Price: ~$140.83
- Potential Upside: +47.4%
Valuation Deep Dive
The investment case for DaVita is based on its transition from a fee-for-service provider to a value-based care platform.
With the stock trading at ~$141, the valuation has reset to levels that offer a significant margin of safety.
- The Profit Driver: The model forecasts Net Income Margins expanding to 7.7% over the next 5 years, driven by the profitability of the IKC unit.
- The Cash Flow: DaVita continues to be a cash machine, with Free Cash Flow expected to exceed $1.0 billion in 2026, supporting further share buybacks.
- The Value Gap: The $207 target implies that the market is currently assigning zero value to the future growth of the integrated care business.
If DaVita can deliver on its promise of 2% volume growth in the coming years, the gap between the current price and the $207 target should close rapidly.
Conclusion: A healthy pullback. With a 47.4% upside potential to $207, DaVita offers a compelling opportunity for investors to buy a high-quality healthcare compounder at a discount, provided they can look past the short-term noise of insider sales.
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How Much Upside Does DaVita Stock Have From Here?
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!
