Key Stats for DaVita Stock
- Pre-Market price change for DaVita stock: -6%
- $DVA Stock Price as of Aug. 4: $228
- 52-Week High: $248
- $DVA Stock Price Target: $209
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What Happened?
DaVita stock (DVA) dropped almost 6% even though the company beat estimates on both earnings and revenue.
- Adjusted earnings per share came in at $4.02, comfortably ahead of the $3.88 analysts expected,
- Revenue landed at $3.55 billion, above the $3.49 billion forecast.
The issue seems to be guidance. DaVita’s full-year EPS outlook of $14.10 to $15.20 has a midpoint of $14.65, which sits below the $14.88 consensus estimate analysts were using.
Even though the company said on its earnings call that it’s reaffirming this range, the fact that the midpoint trails Wall Street’s number appears to be weighing on the stock today.
CEO Javier Rodriguez pointed to solid clinical momentum during the call, saying volume growth continued to accelerate, driven mainly by improving mortality rates among patients.
CFO Joel Ackerman noted that revenue per treatment declined slightly from Q1, which the company had expected, due to a smaller mix of commercial patients following changes to ACA subsidy enrollment, along with lower revenue from phosphate binder medications now bundled into Medicare payments.
On the cost side, patient care costs per treatment actually dropped sequentially in Q2, helped by better operating leverage as treatment volumes rose. Still, year-to-date cost growth has run a bit above the company’s expected range for the full year.
DaVita also touched on a new therapy option called expanded HD, a dialysis approach that recently showed strong clinical results in a head-to-head trial against an existing method.
The company said it has secured enough supply to begin rolling this out across its network in the coming quarters, though executives noted any meaningful financial benefit from improved patient outcomes likely won’t show up until 2028.
On capital allocation, DaVita repurchased 2.2 million shares during the quarter and closed a $200 million minority investment in home health company Elara Caring in July. The company’s leverage ratio ended the quarter at 3.37 times EBITDA, within its target range.
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What the Market Is Telling Us About DaVita Stock
The drop in DaVita stock today shows that beating current-quarter numbers isn’t always enough when the forward outlook disappoints.
With guidance now trailing what analysts had penciled in, investors seem to be focused more on the path ahead than the results just delivered.
That said, it’s worth remembering DaVita stock has had a strong run recently, up nearly 48% over the past three months and up over 63% over the past year, so some of today’s pullback may simply reflect investors taking profits after a big rally.
The company’s underlying clinical trends, including improving patient mortality and a promising new dialysis therapy, suggest the long-term story hasn’t changed much, even if today’s guidance fell just short of expectations.
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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!
