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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's recent performance was driven by a strong earnings beat, with Q4 2025 adjusted earnings per share of $3.40, surpassing estimates. The company's strategy in home dialysis, integrated kidney care, and international expansion supports double-digit growth and margin stability. Adjusted operating income for 2025 was $2.094 billion, with a confident 2026 outlook. A "BUY" rating was reiterated by an analyst, citing a fair value of $185/share. The company's growth strategy and financial performance have been positively received.

1.c. Company Highlights

2. Dialysis Company's Q4 Earnings Beat Expectations

The company's fourth-quarter financial performance was in line with expectations, with revenue per treatment accelerating in the quarter alongside strength in Integrated Kidney Care (IKC), partially offset by higher-than-expected health benefit costs. Adjusted operating income was $586 million, bringing full-year adjusted operating income to $2.094 billion. Adjusted earnings per share from continuing operations for the fourth quarter was $3.40, beating analysts' estimates of $3.24, with full-year adjusted EPS from continuing operations of $10.78. Free cash flow was $309 million in the fourth quarter, bringing full-year free cash flow to just over $1 billion.

Publication Date: Feb -16

📋 Highlights
  • 2025 Financial Performance: Adjusted operating income hit $2.094B (up 3.2% YoY), with adjusted EPS at $10.78 (33% growth YoY), driven by IKC improvements despite a cyber incident impact.
  • 2026 Guidance: Adjusted operating income of $2.16B (3.2% growth midpoint) and adjusted EPS of $14.30 (33% growth midpoint), with free cash flow expected between $1B–$1.25B.
  • IKC Program Outcomes: Patients under IKC are 35% more likely to start dialysis with permanent vascular access, with 3x lower first-180-day costs and 10% better treatment adherence.
  • Cyber Incident Impact: $70M headwind in 2025 ($25M from lost census, $45M from RPT reduction), with $25M non-recurring in 2026 and $45M offset by ACA tax credit adjustments.

IKC Program Shows Significant Improvement

The IKC program has shown significant improvement in patient outcomes, with patients managed under IKC models being 35% more likely to start dialysis with a permanent vascular access, resulting in a better patient experience and costs that are 3x lower during the first 180 days of dialysis. The company also sees more than 10% improvement in treatment adherence with fewer missed treatments. According to Javier Rodriguez, "We're executing a set of targeted initiatives designed to enhance patient care, reduce mortality and missed treatment rates, and ultimately support higher treatment volume growth."

Guidance for 2026

For 2026, the company expects adjusted operating income within a range of $2.085 billion to $2.235 billion, representing 3.2% growth at the midpoint. Guidance for adjusted earnings per share is $13.60 to $15 even, reflecting a 33% growth at the midpoint. The company also expects to generate free cash flow between $1 billion and $1.25 billion. Analysts estimate next year's revenue growth at 2.9%.

Valuation Metrics

Using the current stock price, the company's P/E Ratio is 17.17, EV/EBITDA is 9.18, and Free Cash Flow Yield is 13.16%. These metrics indicate that the stock may be reasonably valued, with a moderate price-to-earnings ratio and a high free cash flow yield, suggesting that the company's cash generation capabilities are being recognized by the market.

IKC Operating Income Growth

The company expects to deliver an incremental $20 million of IKC operating income growth in 2026, driven by its focus on clinical excellence and initiatives to enhance patient care. This growth is expected to contribute to the company's overall profit growth, driven by its IKC program and other initiatives.

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Truist Financial Corp Buys 4,186 Shares of DaVita Inc. $DVA

Feb -08

Source: defenseworld.net

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Analysts Set DaVita Inc. (NYSE:DVA) Price Target at $155.50

Feb -08

Source: defenseworld.net

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: 6.1/10

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Growth: 5.1

Quality: 7.0

Yield: 2.0

Momentum: 8.0

Volatility: 8.7

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Quality: 4.7

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DaVita

A-Score: 4.8/10

Value: 8.0

Growth: 7.0

Quality: 4.7

Yield: 0.0

Momentum: 2.0

Volatility: 7.0

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A-Score: 4.4/10

Value: 7.7

Growth: 4.3

Quality: 4.0

Yield: 4.0

Momentum: 1.0

Volatility: 5.3

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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

150.73$

Current Price

150.73$

Potential

-0.00%

Expected Cash-Flows