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DaVita Inc. (DVA) Hit a 52 Week High, Can the Run Continue?
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Have you been paying attention to shares of DaVita HealthCare (DVA - Free Report) ? Shares have been on the move with the stock up 20.1% over the past month. The stock hit a new 52-week high of $136.29 in the previous session. DaVita HealthCare has gained 28.5% since the start of the year compared to the 6.5% move for the Zacks Medical sector and the 6.4% return for the Zacks Medical - Outpatient and Home Healthcare industry.
What's Driving the Outperformance?
The stock has a great record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on February 13, 2024, DaVita HealthCare reported EPS of $1.87 versus consensus estimate of $1.53 while it beat the consensus revenue estimate by 4.82%.
For the current fiscal year, DaVita HealthCare is expected to post earnings of $8.97 per share on $12.47 billion in revenues. This represents a 5.9% change in EPS on a 2.74% change in revenues. For the next fiscal year, the company is expected to earn $9.77 per share on $12.91 billion in revenues. This represents a year-over-year change of 8.93% and 3.47%, respectively.
Valuation Metrics
DaVita HealthCare may be at a 52-week high right now, but what might the future hold for the stock? A key aspect of this question is taking a look at valuation metrics in order to determine if the company is due for a pullback from this level.
On this front, we can look at the Zacks Style Scores, as they provide investors with an additional way to sort through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. Investors should consider the style scores a valuable tool that can help you to pick the most appropriate Zacks Rank stocks based on their individual investment style.
DaVita HealthCare has a Value Score of A. The stock's Growth and Momentum Scores are C and C, respectively, giving the company a VGM Score of B.
In terms of its value breakdown, the stock currently trades at 15X current fiscal year EPS estimates, which is not in-line with the peer industry average of 20.5X. On a trailing cash flow basis, the stock currently trades at 8X versus its peer group's average of 11.2X. Additionally, the stock has a PEG ratio of 1.24. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.
Zacks Rank
We also need to consider the stock's Zacks Rank, as this supersedes any trend on the style score front. Fortunately, DaVita HealthCare currently has a Zacks Rank of #1 (Strong Buy) thanks to rising earnings estimates.
Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if DaVita HealthCare meets the list of requirements. Thus, it seems as though DaVita HealthCare shares could have a bit more room to run in the near term.
How Does DVA Stack Up to the Competition?
Shares of DVA have been soaring, and the company still appears to be a decent choice, but what about the rest of the industry? One industry peer that looks good is Addus HomeCare Corporation (ADUS - Free Report) . ADUS has a Zacks Rank of # 2 (Buy) and a Value Score of B, a Growth Score of B, and a Momentum Score of C.
Earnings were strong last quarter. Addus HomeCare Corporation beat our consensus estimate by 13.79%, and for the current fiscal year, ADUS is expected to post earnings of $4.84 per share on revenue of $1.14 billion.
Shares of Addus HomeCare Corporation have gained 11.8% over the past month, and currently trade at a forward P/E of 20.18X and a P/CF of 19.36X.
The Medical - Outpatient and Home Healthcare industry is in the top 15% of all the industries we have in our universe, so it looks like there are some nice tailwinds for DVA and ADUS, even beyond their own solid fundamental situation.
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DaVita Inc. (DVA) Hit a 52 Week High, Can the Run Continue?
Have you been paying attention to shares of DaVita HealthCare (DVA - Free Report) ? Shares have been on the move with the stock up 20.1% over the past month. The stock hit a new 52-week high of $136.29 in the previous session. DaVita HealthCare has gained 28.5% since the start of the year compared to the 6.5% move for the Zacks Medical sector and the 6.4% return for the Zacks Medical - Outpatient and Home Healthcare industry.
What's Driving the Outperformance?
The stock has a great record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on February 13, 2024, DaVita HealthCare reported EPS of $1.87 versus consensus estimate of $1.53 while it beat the consensus revenue estimate by 4.82%.
For the current fiscal year, DaVita HealthCare is expected to post earnings of $8.97 per share on $12.47 billion in revenues. This represents a 5.9% change in EPS on a 2.74% change in revenues. For the next fiscal year, the company is expected to earn $9.77 per share on $12.91 billion in revenues. This represents a year-over-year change of 8.93% and 3.47%, respectively.
Valuation Metrics
DaVita HealthCare may be at a 52-week high right now, but what might the future hold for the stock? A key aspect of this question is taking a look at valuation metrics in order to determine if the company is due for a pullback from this level.
On this front, we can look at the Zacks Style Scores, as they provide investors with an additional way to sort through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. Investors should consider the style scores a valuable tool that can help you to pick the most appropriate Zacks Rank stocks based on their individual investment style.
DaVita HealthCare has a Value Score of A. The stock's Growth and Momentum Scores are C and C, respectively, giving the company a VGM Score of B.
In terms of its value breakdown, the stock currently trades at 15X current fiscal year EPS estimates, which is not in-line with the peer industry average of 20.5X. On a trailing cash flow basis, the stock currently trades at 8X versus its peer group's average of 11.2X. Additionally, the stock has a PEG ratio of 1.24. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.
Zacks Rank
We also need to consider the stock's Zacks Rank, as this supersedes any trend on the style score front. Fortunately, DaVita HealthCare currently has a Zacks Rank of #1 (Strong Buy) thanks to rising earnings estimates.
Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if DaVita HealthCare meets the list of requirements. Thus, it seems as though DaVita HealthCare shares could have a bit more room to run in the near term.
How Does DVA Stack Up to the Competition?
Shares of DVA have been soaring, and the company still appears to be a decent choice, but what about the rest of the industry? One industry peer that looks good is Addus HomeCare Corporation (ADUS - Free Report) . ADUS has a Zacks Rank of # 2 (Buy) and a Value Score of B, a Growth Score of B, and a Momentum Score of C.
Earnings were strong last quarter. Addus HomeCare Corporation beat our consensus estimate by 13.79%, and for the current fiscal year, ADUS is expected to post earnings of $4.84 per share on revenue of $1.14 billion.
Shares of Addus HomeCare Corporation have gained 11.8% over the past month, and currently trade at a forward P/E of 20.18X and a P/CF of 19.36X.
The Medical - Outpatient and Home Healthcare industry is in the top 15% of all the industries we have in our universe, so it looks like there are some nice tailwinds for DVA and ADUS, even beyond their own solid fundamental situation.