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DaVita (DVA): What's in the Cards this Earnings Season?
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Denver, CO-based DaVita HealthCare Partners Inc (DVA - Free Report) , a leading provider of dialysis services in the U.S. to patients suffering from chronic kidney failure, is expected to report first-quarter fiscal 2017 results on May 2, after market close.
Last quarter, the company reported earnings of 98 cents per share, which beat the Zacks Consensus Estimate of 91 cents. Meanwhile, over the last four trailing quarters, the company posted an average earnings beat of 4.4%.
Factors at Play
Steady overseas expansion through strategic alliances and acquisition of dialysis centers has played a key role in boosting growth for DaVita. In January, the company disclosed a new supply agreement with Amgen. The contract is a six-year one that is expected to provide ‘substantial savings’ from the beginning of the year. However, other specific terms (including pricing) of the agreement have been kept under wraps.
DaVita HealthCare Partners Inc. Price and EPS Surprise
In Feb 2017, DaVita HealthCare Partners announced that HealthCare Partners, a unit within its medical group, has entered into a strategic partnership with Cigna. This is an impressive expansionary move in Los Angeles which is expected to yield accretive returns over the long haul. We believe DaVita’s constant efforts to upgrade its quality of services, global expansion and active acquisitions are key positives.
On the flipside, escalating expenses are a concern. Management expects significant decrease in operational income, especially in the pharmacy business, for fiscal 2017 as a whole. The company expects a hike in its dialysis and related lab services in the quarter, indicating probabilities of a rise in its general and administrative expenses.
DaVita’s plans to improve its information technology infrastructure and support certain regulatory compliance and legal matters are also likely to drive expenses in the quarter.
Price Performance & Estimate Revision Trend
DaVita has had an impressive run on the bourse over the last three months. The company gained roughly 6.5%, higher than the Zacks categorized Medical - Outpatient and Home Healthcare sub-industry’s addition of almost 3.1%.
Moreover, the current level compares favorably with the S&P 500’s return of 5.4% over the same time frame. This, together with a long-term expected earnings growth rate of 9.5%, instills confidence in investors.
Coming to estimate revisions, the Zacks Consensus Estimate for current quarter earnings has been stable at 82 cents per share over the last two months.
Let’s see how things are shaping up prior to this quarter.
Earnings Whispers
Despite the solid prospects, our quantitative model doesn’t conclusively point to an earnings beat this quarter for the stock.
That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. That is not the case here as you will see below.
Zacks ESP: The Earnings ESP for DaVita is 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at 82 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: DaVita carries a Zacks Rank #3 which increases the predictive power of ESP. However, the company’s 0.00% ESP makes surprise prediction difficult.
Meanwhile, please note that we caution against stocks with a Zacks Ranks #4 and 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revision.
Stocks to Consider
Here are some companies you may want to consider as our model shows that they have the right combination of elements to post an earnings beat this quarter:
Best Buy Co. Inc. (BBY - Free Report) has an Earnings ESP of +12.50% and a Zacks Rank #3. Additionally, on an average, the stock represented a positive surprise of almost 27.70% in the last four quarters.
Raymond James Financial, Inc. (RJF - Free Report) has an Earnings ESP of +3.45% and a Zacks Rank #1. The stock represented a positive surprise of almost 14.4% in the last four trailing quarters.
Sell These Stocks. Now.
Just released, today's 220 Zacks Rank #5 Strong Sells demand urgent attention. If any are lurking in your portfolio or Watch List, they should be removed immediately. These are sinister companies because many appear to be sound investments. However, from 1988 through 2016, stocks from our Strong Sell list have actually performed 6X worse than the S&P 500.
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DaVita (DVA): What's in the Cards this Earnings Season?
Denver, CO-based DaVita HealthCare Partners Inc (DVA - Free Report) , a leading provider of dialysis services in the U.S. to patients suffering from chronic kidney failure, is expected to report first-quarter fiscal 2017 results on May 2, after market close.
Last quarter, the company reported earnings of 98 cents per share, which beat the Zacks Consensus Estimate of 91 cents. Meanwhile, over the last four trailing quarters, the company posted an average earnings beat of 4.4%.
Factors at Play
Steady overseas expansion through strategic alliances and acquisition of dialysis centers has played a key role in boosting growth for DaVita. In January, the company disclosed a new supply agreement with Amgen. The contract is a six-year one that is expected to provide ‘substantial savings’ from the beginning of the year. However, other specific terms (including pricing) of the agreement have been kept under wraps.
DaVita HealthCare Partners Inc. Price and EPS Surprise
DaVita HealthCare Partners Inc. Price and EPS Surprise | DaVita HealthCare Partners Inc. Quote
In Feb 2017, DaVita HealthCare Partners announced that HealthCare Partners, a unit within its medical group, has entered into a strategic partnership with Cigna. This is an impressive expansionary move in Los Angeles which is expected to yield accretive returns over the long haul. We believe DaVita’s constant efforts to upgrade its quality of services, global expansion and active acquisitions are key positives.
On the flipside, escalating expenses are a concern. Management expects significant decrease in operational income, especially in the pharmacy business, for fiscal 2017 as a whole. The company expects a hike in its dialysis and related lab services in the quarter, indicating probabilities of a rise in its general and administrative expenses.
DaVita’s plans to improve its information technology infrastructure and support certain regulatory compliance and legal matters are also likely to drive expenses in the quarter.
Price Performance & Estimate Revision Trend
DaVita has had an impressive run on the bourse over the last three months. The company gained roughly 6.5%, higher than the Zacks categorized Medical - Outpatient and Home Healthcare sub-industry’s addition of almost 3.1%.
Moreover, the current level compares favorably with the S&P 500’s return of 5.4% over the same time frame. This, together with a long-term expected earnings growth rate of 9.5%, instills confidence in investors.
Coming to estimate revisions, the Zacks Consensus Estimate for current quarter earnings has been stable at 82 cents per share over the last two months.
Let’s see how things are shaping up prior to this quarter.
Earnings Whispers
Despite the solid prospects, our quantitative model doesn’t conclusively point to an earnings beat this quarter for the stock.
That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. That is not the case here as you will see below.
Zacks ESP: The Earnings ESP for DaVita is 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at 82 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: DaVita carries a Zacks Rank #3 which increases the predictive power of ESP. However, the company’s 0.00% ESP makes surprise prediction difficult.
Meanwhile, please note that we caution against stocks with a Zacks Ranks #4 and 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revision.
Stocks to Consider
Here are some companies you may want to consider as our model shows that they have the right combination of elements to post an earnings beat this quarter:
Best Buy Co. Inc. (BBY - Free Report) has an Earnings ESP of +12.50% and a Zacks Rank #3. Additionally, on an average, the stock represented a positive surprise of almost 27.70% in the last four quarters.
Global Partners LP (GLP - Free Report) has an Earnings ESP of +233.33% and a Zacks Rank #1. The stock represented a positive surprise of almost 96.55% in the trailing four quarters. You can see the complete list of today’s Zacks #1 Rank stocks here.
Raymond James Financial, Inc. (RJF - Free Report) has an Earnings ESP of +3.45% and a Zacks Rank #1. The stock represented a positive surprise of almost 14.4% in the last four trailing quarters.
Sell These Stocks. Now.
Just released, today's 220 Zacks Rank #5 Strong Sells demand urgent attention. If any are lurking in your portfolio or Watch List, they should be removed immediately. These are sinister companies because many appear to be sound investments. However, from 1988 through 2016, stocks from our Strong Sell list have actually performed 6X worse than the S&P 500.
See today's Zacks "Strong Sells" absolutely free >>.