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Why Is DaVita HealthCare (DVA) Up 2.9% Since Last Earnings Report?

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It has been about a month since the last earnings report for DaVita HealthCare (DVA - Free Report) . Shares have added about 2.9% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is DaVita HealthCare due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.

DaVita Q3 Earnings Beat Estimates, 2019 View Impressive
 
DaVita reported third-quarter 2019 adjusted earnings per share of $1.53, beating the Zacks Consensus Estimate of $1.23. The bottom line increased from the year-ago quarter’s figure of 56 cents.
 
Total revenues in the quarter moved up 2% year over year to $2.90 billion, beating the Zacks Consensus Estimate of $2.85 billion.
 
Third-quarter adjusted operating income totaled $462 million, up 47.1% year over year.
 
Segment Details
 
Net dialysis and related lab patient service revenues in the third quarter totaled $2.78 billion, up 4.5% on a year-over-year basis. Other revenues were $126 million, down 32.7% from the year-ago quarter’s figure.
 
Per management, total U.S. dialysis treatments for the third quarter were 7,673,191 or an average of 97,129 treatments per day. The figure represents a per day increase of 2.7% on a year-over-year basis.
 
Moreover, the company provided dialysis services to 233,300 patients at 2,985 outpatient dialysis centers. Of the total, 2,736 centers were located in the United States and 249 centers were located in nine other countries.
 
Financial Condition
 
DaVita exited the third quarter with operating cash flow of $641 million.
 
Guidance
 
DaVita raised its guidance for 2019.
 
Notably, the company now expects adjusted operating income between $1.74 billion and $1.77 billion compared with the previous guidance of $1.64-$1.70 billion.
 
Adjusted EPS is expected in the range of $5.25-$5.75, higher than the previous expectation of $5-$5.50.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed an upward trend in estimates review. The consensus estimate has shifted 15.98% due to these changes.

VGM Scores

Currently, DaVita HealthCare has a nice Growth Score of B, a grade with the same score on the momentum front. Charting a somewhat similar path, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.

Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise DaVita HealthCare has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months.


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