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DaVita HealthCare (DVA) Surges 6%: Is This an Indication of Further Gains?

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DaVita HealthCare (DVA - Free Report) shares soared 6% in the last trading session to close at $80.58. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock's 18.6% loss over the past four weeks.

DaVita recorded a strong price increase before its second-quarter 2022 earnings release with the latest Zacks Consensus Estimate showing decent upward revision compared to the year-ago reported number. The company is expected to release its second-quarter earnings on Aug 2, 2022. DaVita’s entry into an agreement with Medtronic plc to form an independent kidney care-focused medical device company, termed now NewCo, also raises optimism.

This kidney dialysis provider is expected to post quarterly earnings of $2.10 per share in its upcoming report, which represents a year-over-year change of -20.5%. Revenues are expected to be $2.93 billion, up 0.5% from the year-ago quarter.

Earnings and revenue growth expectations certainly give a good sense of the potential strength in a stock, but empirical research shows that trends in earnings estimate revisions are strongly correlated with near-term stock price movements.

For DaVita HealthCare, the consensus EPS estimate for the quarter has remained unchanged over the last 30 days. And a stock's price usually doesn't keep moving higher in the absence of any trend in earnings estimate revisions. So, make sure to keep an eye on DVA going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

DaVita HealthCare belongs to the Zacks Medical - Outpatient and Home Healthcare industry. Another stock from the same industry, U.S. Physical Therapy (USPH - Free Report) , closed the last trading session 1.8% higher at $107.85. Over the past month, USPH has returned -3.3%.

For U.S. Physical Therapy, the consensus EPS estimate for the upcoming report has remained unchanged over the past month at $0.93. This represents a change of -3.1% from what the company reported a year ago. U.S. Physical Therapy currently has a Zacks Rank of #2 (Buy).

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