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1. Company Snapshot

1.a. Company Description

DaVita Inc.provides kidney dialysis services for patients suffering from chronic kidney failure.The company operates kidney dialysis centers and provides related lab services in outpatient dialysis centers.


It also provides outpatient, hospital inpatient, and home-based hemodialysis services; owns clinical laboratories that provide routine laboratory tests for dialysis and other physician-prescribed laboratory tests for ESRD patients; and management and administrative services to outpatient dialysis centers.In addition, the company provides disease management services to 16,000 patients in risk-based integrated care arrangements and 7,000 patients in other integrated care arrangements; vascular access services; clinical research programs; physician services; and comprehensive kidney care services.As of December 31, 2021, it provided dialysis and administrative services in the United States through a network of 2,815 outpatient dialysis centers serving approximately 203,100 patients; and operated 339 outpatient dialysis centers located in 10 countries outside of the United States serving approximately 39,900 patients.


Further, the company provides acute inpatient dialysis services in approximately 850 hospitals and related laboratory services in the United States.The company was formerly known as DaVita HealthCare Partners Inc.and changed its name to DaVita Inc.


in September 2016.DaVita Inc.was incorporated in 1994 and is headquartered in Denver, Colorado.

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1.b. Last Insights on DVA

DaVita Inc.'s recent performance was negatively impacted by its Q3 earnings miss, with earnings per share of $2.51, falling short of the Zacks Consensus Estimate of $3.29. Revenue growth was reported, but tightened margins offset this positive trend. Additionally, Asset Management One Co. Ltd. and Securian Asset Management Inc. reduced their stakes in the company by 10.1% and 8.9%, respectively. These reductions in holdings by institutional investors may have contributed to downward pressure.

1.c. Company Highlights

2. DaVita's Q3 2025 Earnings: A Mixed Bag

DaVita's third-quarter 2025 financial performance was in line with expectations, with an adjusted operating income of $517 million and adjusted earnings per share of $2.51, falling short of analyst estimates of $3.17. Revenue per treatment increased by about $6 from the second quarter, driven by rate increases and higher revenue from phosphate binders. The company's U.S. dialysis treatment volume declined approximately 1.5% year-over-year, primarily due to the severe flu season, Hurricane Helene, and a cyber incident.

Publication Date: Nov -03

📋 Highlights
  • Adjusted Financials Meet Expectations: Q3 2025 adjusted operating income of $517M and EPS of $2.51 aligned with guidance despite $50M below consensus estimates.
  • Treatment Volume Decline: U.S. dialysis volume fell 1.5% YoY due to flu season, Hurricane Helene, and a cyber incident, offset by $6 revenue per treatment increase from rate hikes and phosphate binder sales.
  • 2025 Guidance Reaffirmed: Full-year adjusted operating income projected at $2.035B–$2.135B and EPS of $10.35–$11.15, with 2026 growth potential from volume, payer mix, and Integrated Kidney Care (IKC).
  • Share Buybacks and Leverage: $1.5B in share repurchases YTD (3.3M shares in Q3), maintaining a leverage ratio within the 3–3.5x EBITDA target range.
  • 2026 Structural Volume Growth: Expected 50–75 bps improvement in volume growth due to absence of 2025 headwinds, including $60M Q4 operating income boost from seasonal costs, IKC, and revenue per treatment gains.

Operational Challenges

The decline in treatment volume was a significant headwind for the company, but DaVita expects a structural improvement in 2026, with a potential growth rate improvement of 50 to 75 basis points compared to 2025. This improvement is largely due to the absence of one-time headwinds in 2025, such as the flu season and cyber incident. The company is investing in technology infrastructure, including a next-generation clinical platform, scheduling systems, and AI solutions, to drive clinical progress and improve patient care.

Guidance and Outlook

DaVita reaffirmed its full-year guidance, with adjusted operating income expected to be between $2.035 billion and $2.135 billion and adjusted earnings per share between $10.35 and $11.15. For 2026, the company expects several swing factors to influence its performance, including volume, payer mix, and Integrated Kidney Care. The implied fourth-quarter guidance range is wide, around $0.80, with a $60 million uplift in operating income expected in Q4 to hit the midpoint of its guidance.

Valuation and Share Buybacks

DaVita's current valuation metrics, such as a P/E Ratio of 12.18 and EV/EBITDA of 8.29, indicate a relatively stable outlook. The company has been actively repurchasing shares, with 3.3 million shares bought back in the third quarter and an additional 400,000 shares since the end of the quarter, representing approximately $1.5 billion in share buybacks year-to-date. Analysts estimate next year's revenue growth at 3.0%, which may be achievable given the company's expected improvement in treatment volume growth.

Premium Tax Credits and Payer Mix

The company estimated a $120 million headwind over three years due to premium tax credits, with a breakdown of $40 million in year 1, $70 million in year 2, and $10 million in year 3. The private pay mix was down about 15 basis points in the quarter, which is considered normal variability, and flat year-over-year. The commercial treatment mix was around 11%, down 15 bps from Q2 to Q3, with no significant component of positive move in payer mix assumed in the 4Q guide.

3. NewsRoom

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DaVita: More Volatile But Better Upside Than Fresenius

Dec -03

Source: seekingalpha.com

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Edgestream Partners L.P. Invests $6.38 Million in DaVita Inc. $DVA

Dec -03

Source: defenseworld.net

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Hsbc Holdings PLC Sells 6,138 Shares of DaVita Inc. $DVA

Dec -03

Source: defenseworld.net

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Boston Partners Sells 12,151 Shares of DaVita Inc. $DVA

Nov -29

Source: defenseworld.net

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Financial Review: Fresenius SE & Co. (OTCMKTS:FSNUY) vs. DaVita (NYSE:DVA)

Nov -21

Source: defenseworld.net

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DaVita Inc. (DVA) Presents at 7th Annual Wolfe Research Healthcare Conference Transcript

Nov -17

Source: seekingalpha.com

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DaVita Inc. to Participate in Fireside Chat with Wolfe Research

Nov -14

Source: prnewswire.com

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DaVita Marks 25 Years of Innovation with Breakthrough Kidney Care Research at ASN Kidney Week 2025

Nov -04

Source: prnewswire.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (3.88%)

6. Segments

U.S. Dialysis

Expected Growth: 4%

DaVita's U.S. dialysis segment growth is driven by increasing prevalence of end-stage renal disease, aging population, and rising incidence of diabetes and hypertension. Additionally, the company's strategic acquisitions, expansion of home dialysis services, and focus on value-based care models contribute to its growth.

Other - Ancillary Services

Expected Growth: 3%

DaVita's Ancillary Services growth is driven by increasing demand for kidney care services, expansion of its pharmacy and disease management offerings, and strategic partnerships. Additionally, the company's focus on value-based care and population health management contributes to growth. Furthermore, the rising prevalence of chronic kidney disease and end-stage renal disease also fuels demand for these services.

Elimination of Intersegment Revenues

Expected Growth: 2%

DaVita's 2% growth is driven by increasing demand for dialysis services, expansion into new markets, and strategic acquisitions. Additionally, the company's focus on cost savings initiatives, operational efficiencies, and investments in technology have contributed to revenue growth. Furthermore, the shift towards value-based care and the company's ability to adapt to changing regulatory environments have also supported growth.

7. Detailed Products

Dialysis Services

DaVita Inc. provides dialysis services to patients with end-stage renal disease (ESRD) through a network of outpatient dialysis centers.

Home Dialysis

DaVita offers home dialysis services, allowing patients to receive dialysis treatments in the comfort of their own homes.

Peritoneal Dialysis

DaVita provides peritoneal dialysis services, a type of home dialysis that uses the patient's peritoneal membrane to filter waste from the blood.

Hemodialysis

DaVita offers hemodialysis services, a type of dialysis that uses a machine to filter waste from the blood.

Pharmacy Services

DaVita provides pharmacy services, including medication management and dispensing, to patients with ESRD.

Nutrition Services

DaVita offers nutrition services, including personalized dietary counseling and meal planning, to patients with ESRD.

Vascular Access Management

DaVita provides vascular access management services, including vascular access creation and maintenance, to patients with ESRD.

8. DaVita Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

DaVita Inc. operates in a niche market, providing dialysis services to patients with end-stage renal disease. The threat of substitutes is low due to the specialized nature of the services provided.

Bargaining Power Of Customers

DaVita Inc. has a large customer base, but the bargaining power of customers is medium due to the lack of alternatives for dialysis services. However, customers may have some bargaining power due to the high fixed costs associated with switching providers.

Bargaining Power Of Suppliers

DaVita Inc. has a diverse supplier base, and the bargaining power of suppliers is low due to the availability of alternative suppliers. The company's large scale of operations also gives it negotiating power with suppliers.

Threat Of New Entrants

The threat of new entrants is low due to the high barriers to entry in the dialysis services market. New entrants would need to invest heavily in infrastructure, equipment, and staff, making it difficult to enter the market.

Intensity Of Rivalry

The intensity of rivalry in the dialysis services market is high due to the presence of several large players, including Fresenius Medical Care and U.S. Renal Care. The market is highly competitive, with companies competing on factors such as quality of care, convenience, and cost.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 89.03%
Debt Cost 3.95%
Equity Weight 10.97%
Equity Cost 9.12%
WACC 4.51%
Leverage 811.38%

11. Quality Control: DaVita Inc. passed 5 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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Encompass Health

A-Score: 5.7/10

Value: 3.8

Growth: 5.1

Quality: 7.0

Yield: 1.0

Momentum: 8.5

Volatility: 8.7

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Tenet Healthcare

A-Score: 5.2/10

Value: 6.3

Growth: 6.8

Quality: 5.5

Yield: 0.0

Momentum: 7.5

Volatility: 5.3

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Ensign Group

A-Score: 5.0/10

Value: 2.0

Growth: 7.6

Quality: 4.4

Yield: 0.0

Momentum: 7.0

Volatility: 9.0

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DaVita

A-Score: 4.8/10

Value: 8.2

Growth: 7.0

Quality: 4.8

Yield: 0.0

Momentum: 2.0

Volatility: 7.0

1-Year Total Return ->

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Chemed

A-Score: 4.2/10

Value: 2.9

Growth: 6.1

Quality: 7.3

Yield: 0.0

Momentum: 1.0

Volatility: 7.7

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Select Medical

A-Score: 3.8/10

Value: 6.8

Growth: 4.3

Quality: 2.5

Yield: 3.0

Momentum: 1.0

Volatility: 5.3

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

117.39$

Current Price

117.39$

Potential

-0.00%

Expected Cash-Flows