DaVita HealthCare (DVA) Exceeds Market Returns: Some Facts to Consider

DaVita HealthCare (DVA) closed the latest trading day at $150.78, indicating a +0.25% change from the previous session’s end. The stock exceeded the S&P 500, which registered a gain of 0.16% for the day. Meanwhile, the Dow gained 0.01%, and the Nasdaq, a tech-heavy index, added 0.46%.

Shares of the kidney dialysis provider witnessed a gain of 5.89% over the previous month, beating the performance of the Medical sector with its loss of 1.17% and the S&P 500’s loss of 3.59%.

The investment community will be paying close attention to the earnings performance of DaVita HealthCare in its upcoming release. The company is predicted to post an EPS of $1.75, indicating a 26.47% decline compared to the equivalent quarter last year. At the same time, our most recent consensus estimate is projecting a revenue of $3.23 billion, reflecting a 5.27% rise from the equivalent quarter last year.

Looking at the full year, the Zacks Consensus Estimates suggest analysts are expecting earnings of $10.76 per share and revenue of $13.47 billion. These totals would mark changes of +11.16% and +5.08%, respectively, from last year.

Investors should also take note of any recent adjustments to analyst estimates for DaVita HealthCare. These recent revisions tend to reflect the evolving nature of short-term business trends. As such, positive estimate revisions reflect analyst optimism about the company’s business and profitability.

Our research demonstrates that these adjustments in estimates directly associate with imminent stock price performance. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

The Zacks Rank system, spanning from #1 (Strong Buy) to #5 (Strong Sell), boasts an impressive track record of outperformance, audited externally, with #1 ranked stocks yielding an average annual return of +25% since 1988. Over the last 30 days, the Zacks Consensus EPS estimate has witnessed an unchanged state. DaVita HealthCare is currently sporting a Zacks Rank of #3 (Hold).

In terms of valuation, DaVita HealthCare is presently being traded at a Forward P/E ratio of 13.98. This signifies a discount in comparison to the average Forward P/E of 20.66 for its industry.

It is also worth noting that DVA currently has a PEG ratio of 1.1. The PEG ratio bears resemblance to the frequently used P/E ratio, but this parameter also includes the company’s expected earnings growth trajectory. The Medical – Outpatient and Home Healthcare industry currently had an average PEG ratio of 2.1 as of yesterday’s close.