We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
In the last reported quarter, the company’s earnings of $2.30 per share topped the Zacks Consensus Estimate by 9%. Over the trailing four quarters, its earnings outperformed the Zacks Consensus Estimate on three occasions and lagged the same in one, delivering an earnings surprise of 3.8%, on average.
Let’s see how things have shaped up prior to this announcement.
Factors at Play
On the second-quarter 2022 call in August, DaVita confirmed that it registered an uptick in revenue per treatment, partially driven by the continued shift to Medicare Advantage plans. This trend is likely to have continued into the third quarter, thereby driving up the quarter’s revenues. However, decreased government rate related to the reinstatement of 1% Medicare sequestration beginning Apr 1 is likely to have a negative impact on third-quarter revenues.
DaVita acquired MedSleuth in early January. MedSleuth’s software enables closer partnerships and better coordination between transplant centers, nephrologists and kidney care providers, with all three working together to support the company’s patient transplant journey. This is also likely to have aided DaVita in the to-be-reported quarter, thereby pushing up the overall top line.
DaVita has been engaged in a value-based partnership with more than 1,800 nephrologists across the United States, with more than 600 nephrologists using an integrated chronic kidney disease electronic health record. This buoys our optimism about the stock.
During the second-quarter earnings call, management confirmed that COVID-19 infections and mortality in DaVita’s patient pool declined after the Omicron surge in the first quarter of 2022 through May but increased again in June and July. The uncertainty of the impact of COVID on mortality, mistreatment and treatment volumes looms large on DaVita’s performance in the third quarter.
Moreover, labor costs have continued to remain a challenge over the past few months with higher contracted labor utilization and base wage increases. Despite management’s efforts to offset the impact of wage and other inflationary increases, these are likely to have weighed on the company’s third-quarter 2022 top line.
The Estimate Picture
For third-quarter 2022, the Zacks Consensus Estimate of $2.98 billion for total revenues calls for an improvement of 1.5% from the prior-year reported figure.
We estimate third-quarter total revenues to be $2.97 billion, reflecting an uptick of 1.2% year over year.
The consensus estimate for earnings per share is pegged at $1.67, indicating a decline of 29.2% from the prior-year reported number.
We estimate third-quarter earnings to be $1.72, reflecting a decline of 27.2% year over year.
What Our Model Suggests
Per our proven model, a stock with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold), along with a positive Earnings ESP has higher chances of beating estimates. This is not the case here, as you can see below.
Earnings ESP: DaVita has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
Zacks Rank: The company currently carries a Zacks Rank #3.
Stocks Worth a Look
Here are a few medical stocks worth considering, as these have the right combination of elements to beat on earnings this reporting cycle.
McKesson Corporation (MCK - Free Report) has an Earnings ESP of +0.27% and a Zacks Rank of 2. MCK has an estimated long-term growth rate of 10.1%.
Nevro Corp. (NVRO - Free Report) has an Earnings ESP of +10.91% and is a Zacks #2 Rank stock. NVRO has an estimated growth rate of 23.3% for 2022.
Nevro’s earnings surpassed estimates in two of the trailing four quarters, missed the same in one and matched in the other, with the average surprise being 5.7%.
Humana Inc. (HUM - Free Report) has an Earnings ESP of +1.12% and sports a Zacks Rank of 1 at present. HUM has an estimated long-term growth rate of 13.8%.
Humana’s earnings surpassed estimates in all the trailing four quarters, with the average surprise being 9.1%.
Image: Bigstock
DaVita (DVA) to Report Q3 Earnings: What's in the Offing?
DaVita Inc. (DVA - Free Report) is scheduled to release third-quarter 2022 results on Oct 28, before market open.
In the last reported quarter, the company’s earnings of $2.30 per share topped the Zacks Consensus Estimate by 9%. Over the trailing four quarters, its earnings outperformed the Zacks Consensus Estimate on three occasions and lagged the same in one, delivering an earnings surprise of 3.8%, on average.
Let’s see how things have shaped up prior to this announcement.
Factors at Play
On the second-quarter 2022 call in August, DaVita confirmed that it registered an uptick in revenue per treatment, partially driven by the continued shift to Medicare Advantage plans. This trend is likely to have continued into the third quarter, thereby driving up the quarter’s revenues. However, decreased government rate related to the reinstatement of 1% Medicare sequestration beginning Apr 1 is likely to have a negative impact on third-quarter revenues.
DaVita acquired MedSleuth in early January. MedSleuth’s software enables closer partnerships and better coordination between transplant centers, nephrologists and kidney care providers, with all three working together to support the company’s patient transplant journey. This is also likely to have aided DaVita in the to-be-reported quarter, thereby pushing up the overall top line.
DaVita Inc. Price and EPS Surprise
DaVita Inc. price-eps-surprise | DaVita Inc. Quote
DaVita has been engaged in a value-based partnership with more than 1,800 nephrologists across the United States, with more than 600 nephrologists using an integrated chronic kidney disease electronic health record. This buoys our optimism about the stock.
During the second-quarter earnings call, management confirmed that COVID-19 infections and mortality in DaVita’s patient pool declined after the Omicron surge in the first quarter of 2022 through May but increased again in June and July. The uncertainty of the impact of COVID on mortality, mistreatment and treatment volumes looms large on DaVita’s performance in the third quarter.
Moreover, labor costs have continued to remain a challenge over the past few months with higher contracted labor utilization and base wage increases. Despite management’s efforts to offset the impact of wage and other inflationary increases, these are likely to have weighed on the company’s third-quarter 2022 top line.
The Estimate Picture
For third-quarter 2022, the Zacks Consensus Estimate of $2.98 billion for total revenues calls for an improvement of 1.5% from the prior-year reported figure.
We estimate third-quarter total revenues to be $2.97 billion, reflecting an uptick of 1.2% year over year.
The consensus estimate for earnings per share is pegged at $1.67, indicating a decline of 29.2% from the prior-year reported number.
We estimate third-quarter earnings to be $1.72, reflecting a decline of 27.2% year over year.
What Our Model Suggests
Per our proven model, a stock with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold), along with a positive Earnings ESP has higher chances of beating estimates. This is not the case here, as you can see below.
Earnings ESP: DaVita has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
Zacks Rank: The company currently carries a Zacks Rank #3.
Stocks Worth a Look
Here are a few medical stocks worth considering, as these have the right combination of elements to beat on earnings this reporting cycle.
McKesson Corporation (MCK - Free Report) has an Earnings ESP of +0.27% and a Zacks Rank of 2. MCK has an estimated long-term growth rate of 10.1%.
McKesson’s earnings surpassed estimates in three of the trailing four quarters and missed the same in one, with the average surprise being 13%. You can see the complete list of today’s Zacks #1 Rank stocks here.
Nevro Corp. (NVRO - Free Report) has an Earnings ESP of +10.91% and is a Zacks #2 Rank stock. NVRO has an estimated growth rate of 23.3% for 2022.
Nevro’s earnings surpassed estimates in two of the trailing four quarters, missed the same in one and matched in the other, with the average surprise being 5.7%.
Humana Inc. (HUM - Free Report) has an Earnings ESP of +1.12% and sports a Zacks Rank of 1 at present. HUM has an estimated long-term growth rate of 13.8%.
Humana’s earnings surpassed estimates in all the trailing four quarters, with the average surprise being 9.1%.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.