Headquartered in Denver, Colorado, DaVita Inc. (DVA) is a leading provider of dialysis services for patients with chronic kidney failure, or end-stage renal disease (ESRD) in the U.S. With a market cap of $13.2 billion, the company’s other ancillary services and strategic initiatives segment encompasses international dialysis services, pharmacy and infusion therapy, disease management, vascular access, ESRD clinical research, and physician services.

Shares of the kidney specialist have surpassed the broader market over the past year. While DVA stock has surged 44.1% over this time frame, the S&P 500 Index ($SPX) has rallied by 26.1%. In 2024 alone, the stock rose 43.5%, compared to SPX’s 16.5% return on a YTD basis. 

Narrowing the focus, DVA has also outperformed the SPDR S&P Health Care Services ETF (XHS), which has gained 7% over the past year.

As a leading global provider of kidney care services, DaVita operates over 3,000 facilities worldwide, primarily in the U.S., and treats approximately 250,000 patients annually. DaVita has experienced robust momentum over the past year, fueled by strong revenue growth and effective cost management despite operational challenges. The company’s comprehensive services span the entire kidney health journey, from disease progression management and transplantation support to acute hospital care and at-home dialysis.

However, On Jul. 15, DaVita's shares dropped by over 3% following reports that the U.S. Federal Trade Commission was investigating the company for allegedly preventing physicians from joining competitors or establishing their own practices.

However, for the current fiscal year, ending in December, analysts expect DVA’s EPS to rise 16.9% year over year to $9.90. Nonetheless, the company’s earnings surprise history is solid, exceeding the consensus estimate in each of the last four quarters.

However, DaVita stock has a consensus “Hold” rating overall. Out of seven analysts covering the stock, one recommends a "Strong Buy," five suggest a "Hold," and one advises a "Moderate Sell."

The configuration has been stable over the past months.

On Aug. 7, Bank of America (BAC) analyst Kevin Fischbeck raised DaVita's price target to $145 from $139 but maintained an “Underperform” rating. While the firm is raising its EBITDA estimates, it questions the sustainability of DVA’s margin improvements if volumes don't increase, leading to the reiteration of the Underperform rating due to low visibility on volume growth.

Although the stock trades at a premium to the mean price target of $148.36, the Street-high target of $175 represents a 16.4% upside potential.

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On the date of publication, Kritika Sarmah 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.