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DaVita HealthCare (DVA) Up 22.8% Since Last Earnings Report: Can It Continue?
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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 22.8% 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 the most recent earnings report in order to get a better handle on the important catalysts.
DaVita Q3 Earnings & Revenues Top Estimates, Margins Up
DaVita delivered adjusted earnings per share of $2.85 in the third quarter of 2023, up 37% sequentially. The figure topped the Zacks Consensus Estimate by 48.4%.
GAAP earnings per share for the quarter was $2.62, reflecting a surge of 131.9% year over year.
Revenues in Detail
Revenues of $3.12 billion in the third quarter were up by 5.9% year over year. The figure surpassed the Zacks Consensus Estimate by 3.7%.
The top line was driven by solid performances of DaVita’s dialysis patient service revenues and Other revenues.
Segment Details
The company’s dialysis patient service revenues were $2.95 billion, up by 3.7% year over year.
Other revenues were $169.4 million, up 65.7% from the year-ago quarter’s figure.
Per management, the total U.S. dialysis treatments for the third quarter were 7,306,948 or 92,493 per day, on average. This represents a per-day decrease of 0.2% on a sequential basis. Normalized non-acquired treatment growth in the third quarter of 2023 was 0.5% year over year.
As of Sep 30, 2023, DaVita provided dialysis services to around 249,100 patients at 3,053 outpatient dialysis centers, of which 2,694 were U.S. centers while 359 were located across 11 other countries.
During the third quarter of 2023, the company opened a total of five new dialysis centers and closed 15 dialysis centers in the United States. It also acquired two dialysis centers and opened four new dialysis centers outside the United States in the same period.
Margin Details
In the quarter under review, DaVita’s gross profit rose 22.1% to $1.05 billion. The gross margin expanded 450 basis points (bps) to 33.8%.
General & administrative expenses climbed 3.1% to $376.9 million.
Adjusted operating profit totaled $677.1 million, reflecting a 36.1% uptick from the prior-year quarter’s level. Adjusted operating margin in the third quarter expanded 482 bps to 21.7%.
Financial Position
DaVita exited the third quarter of 2023 with cash and cash equivalents and short-term investments of $461.2 million compared with $339.9 million at the second-quarter end. Total debt (including the current portion) at the end of third-quarter 2023 was $8.39 billion compared with $8.69 billion at the second-quarter end.
Cumulative net cash flow from operating activities at the end of third-quarter 2023 was $1.57 billion compared with $1.22 billion a year ago.
2023 Guidance
DaVita has raised its adjusted earnings per share outlook for 2023.
Adjusted earnings per share from continuing operations for the full year is now projected to be in the range of $7.80-$8.30, up from the prior outlook of $7.00-$7.80. The Zacks Consensus Estimate currently stands at $7.39.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates.
The consensus estimate has shifted -15.9% due to these changes.
VGM Scores
At this time, DaVita HealthCare has a strong Growth Score of A, though it is lagging a lot on the Momentum Score front with a D. However, 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 broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, DaVita HealthCare has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months.
Performance of an Industry Player
DaVita HealthCare belongs to the Zacks Medical - Outpatient and Home Healthcare industry. Another stock from the same industry, Quest Diagnostics (DGX - Free Report) , has gained 1.1% over the past month. More than a month has passed since the company reported results for the quarter ended September 2023.
Quest Diagnostics reported revenues of $2.3 billion in the last reported quarter, representing a year-over-year change of -7.7%. EPS of $2.22 for the same period compares with $2.36 a year ago.
Quest Diagnostics is expected to post earnings of $2.15 per share for the current quarter, representing a year-over-year change of +8.6%. Over the last 30 days, the Zacks Consensus Estimate remained unchanged.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for Quest Diagnostics. Also, the stock has a VGM Score of B.
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DaVita HealthCare (DVA) Up 22.8% Since Last Earnings Report: Can It Continue?
It has been about a month since the last earnings report for DaVita HealthCare (DVA - Free Report) . Shares have added about 22.8% 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 the most recent earnings report in order to get a better handle on the important catalysts.
DaVita Q3 Earnings & Revenues Top Estimates, Margins Up
DaVita delivered adjusted earnings per share of $2.85 in the third quarter of 2023, up 37% sequentially. The figure topped the Zacks Consensus Estimate by 48.4%.
GAAP earnings per share for the quarter was $2.62, reflecting a surge of 131.9% year over year.
Revenues in Detail
Revenues of $3.12 billion in the third quarter were up by 5.9% year over year. The figure surpassed the Zacks Consensus Estimate by 3.7%.
The top line was driven by solid performances of DaVita’s dialysis patient service revenues and Other revenues.
Segment Details
The company’s dialysis patient service revenues were $2.95 billion, up by 3.7% year over year.
Other revenues were $169.4 million, up 65.7% from the year-ago quarter’s figure.
Per management, the total U.S. dialysis treatments for the third quarter were 7,306,948 or 92,493 per day, on average. This represents a per-day decrease of 0.2% on a sequential basis. Normalized non-acquired treatment growth in the third quarter of 2023 was 0.5% year over year.
As of Sep 30, 2023, DaVita provided dialysis services to around 249,100 patients at 3,053 outpatient dialysis centers, of which 2,694 were U.S. centers while 359 were located across 11 other countries.
During the third quarter of 2023, the company opened a total of five new dialysis centers and closed 15 dialysis centers in the United States. It also acquired two dialysis centers and opened four new dialysis centers outside the United States in the same period.
Margin Details
In the quarter under review, DaVita’s gross profit rose 22.1% to $1.05 billion. The gross margin expanded 450 basis points (bps) to 33.8%.
General & administrative expenses climbed 3.1% to $376.9 million.
Adjusted operating profit totaled $677.1 million, reflecting a 36.1% uptick from the prior-year quarter’s level. Adjusted operating margin in the third quarter expanded 482 bps to 21.7%.
Financial Position
DaVita exited the third quarter of 2023 with cash and cash equivalents and short-term investments of $461.2 million compared with $339.9 million at the second-quarter end. Total debt (including the current portion) at the end of third-quarter 2023 was $8.39 billion compared with $8.69 billion at the second-quarter end.
Cumulative net cash flow from operating activities at the end of third-quarter 2023 was $1.57 billion compared with $1.22 billion a year ago.
2023 Guidance
DaVita has raised its adjusted earnings per share outlook for 2023.
Adjusted earnings per share from continuing operations for the full year is now projected to be in the range of $7.80-$8.30, up from the prior outlook of $7.00-$7.80. The Zacks Consensus Estimate currently stands at $7.39.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates.
The consensus estimate has shifted -15.9% due to these changes.
VGM Scores
At this time, DaVita HealthCare has a strong Growth Score of A, though it is lagging a lot on the Momentum Score front with a D. However, 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 broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, DaVita HealthCare has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months.
Performance of an Industry Player
DaVita HealthCare belongs to the Zacks Medical - Outpatient and Home Healthcare industry. Another stock from the same industry, Quest Diagnostics (DGX - Free Report) , has gained 1.1% over the past month. More than a month has passed since the company reported results for the quarter ended September 2023.
Quest Diagnostics reported revenues of $2.3 billion in the last reported quarter, representing a year-over-year change of -7.7%. EPS of $2.22 for the same period compares with $2.36 a year ago.
Quest Diagnostics is expected to post earnings of $2.15 per share for the current quarter, representing a year-over-year change of +8.6%. Over the last 30 days, the Zacks Consensus Estimate remained unchanged.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for Quest Diagnostics. Also, the stock has a VGM Score of B.