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DaVita HealthCare (DVA) Soars to 52-Week High, Time to Cash Out?
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Have you been paying attention to shares of DaVita (DVA - Free Report) ? Shares have been on the move with the stock up 6.5% over the past month. The stock hit a new 52-week high of $92.67 in the previous session. DaVita has gained 22.4% since the start of the year compared to the 1.6% move for the Zacks Medical sector and the 6.9% return for the Zacks Medical - Outpatient and Home Healthcare industry.
What's Driving the Outperformance?
The stock has an impressive record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on July 30, 2020, DaVita HealthCare reported EPS of $1.95 versus consensus estimate of $1.29 while it missed the consensus revenue estimate by 1.13%.
For the current fiscal year, DaVita HealthCare is expected to post earnings of $6.78 per share on $11.58 billion in revenues. This represents a 25.56% change in EPS on a 1.65% change in revenues. For the next fiscal year, the company is expected to earn $7.2 per share on $11.89 billion in revenues. This represents a year-over-year change of 6.17% and 2.72%, respectively.
Valuation Metrics
DaVita HealthCare may be at a 52-week high right now, but what might the future hold for the stock? A key aspect of this question is taking a look at valuation metrics in order to determine if the company has run ahead of itself.
On this front, we can look at the Zacks Style Scores, as they provide investors with an additional way to sort through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. Investors should consider the style scores a valuable tool that can help you to pick the most appropriate Zacks Rank stocks based on their individual investment style.
DaVita HealthCare has a Value Score of A. The stock's Growth and Momentum Scores are C and B, respectively, giving the company a VGM Score of A.
In terms of its value breakdown, the stock currently trades at 13.5X current fiscal year EPS estimates. On a trailing cash flow basis, the stock currently trades at 8.1X versus its peer group's average of 13.5X. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.
Zacks Rank
We also need to consider the stock's Zacks Rank, as this supersedes any trend on the style score front. Fortunately, DaVita HealthCare currently has a Zacks Rank of #1 (Strong Buy) thanks to favorable earnings estimate revisions from covering analysts.
Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if DaVita HealthCare fits the bill. Thus, it seems as though DaVita HealthCare shares could have potential in the weeks and months to come.
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DaVita HealthCare (DVA) Soars to 52-Week High, Time to Cash Out?
Have you been paying attention to shares of DaVita (DVA - Free Report) ? Shares have been on the move with the stock up 6.5% over the past month. The stock hit a new 52-week high of $92.67 in the previous session. DaVita has gained 22.4% since the start of the year compared to the 1.6% move for the Zacks Medical sector and the 6.9% return for the Zacks Medical - Outpatient and Home Healthcare industry.
What's Driving the Outperformance?
The stock has an impressive record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on July 30, 2020, DaVita HealthCare reported EPS of $1.95 versus consensus estimate of $1.29 while it missed the consensus revenue estimate by 1.13%.
For the current fiscal year, DaVita HealthCare is expected to post earnings of $6.78 per share on $11.58 billion in revenues. This represents a 25.56% change in EPS on a 1.65% change in revenues. For the next fiscal year, the company is expected to earn $7.2 per share on $11.89 billion in revenues. This represents a year-over-year change of 6.17% and 2.72%, respectively.
Valuation Metrics
DaVita HealthCare may be at a 52-week high right now, but what might the future hold for the stock? A key aspect of this question is taking a look at valuation metrics in order to determine if the company has run ahead of itself.
On this front, we can look at the Zacks Style Scores, as they provide investors with an additional way to sort through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. Investors should consider the style scores a valuable tool that can help you to pick the most appropriate Zacks Rank stocks based on their individual investment style.
DaVita HealthCare has a Value Score of A. The stock's Growth and Momentum Scores are C and B, respectively, giving the company a VGM Score of A.
In terms of its value breakdown, the stock currently trades at 13.5X current fiscal year EPS estimates. On a trailing cash flow basis, the stock currently trades at 8.1X versus its peer group's average of 13.5X. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.
Zacks Rank
We also need to consider the stock's Zacks Rank, as this supersedes any trend on the style score front. Fortunately, DaVita HealthCare currently has a Zacks Rank of #1 (Strong Buy) thanks to favorable earnings estimate revisions from covering analysts.
Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if DaVita HealthCare fits the bill. Thus, it seems as though DaVita HealthCare shares could have potential in the weeks and months to come.