DaVita Stock To $94?

DaVita (DVA) stock has jumped 21% during the past day, and is currently trading at $134.73. Our multi-factor assessment suggests that it may be time to sell DVA stock. We have, overall, a pessimistic view of the stock, and a price of $94 may not be out of reach. We believe there are a few things to fear in DVA stock given its overall Weak operating performance and financial condition. Hence, despite its Low valuation, this makes the stock look Risky.

Below is our assessment:

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Let’s get into details of each of the assessed factors but before that, for quick background: With $9.7 Bil in market cap, DaVita provides kidney dialysis and related laboratory services through a nationwide network of outpatient centers and hospitals, serving over 200,000 patients with chronic kidney failure.

[1] Valuation Looks Low

This table highlights how DVA is valued vs broader market. For more details see: DVA Valuation Ratios

[2] Growth Is Weak

• DaVita has seen its top line grow at an average rate of 4.6% over the last 3 years
• Its revenues have grown 5.1% from $13 Bil to $13 Bil in the last 12 months
• Also, its quarterly revenues grew 4.8% to $3.4 Bil in the most recent quarter from $3.3 Bil a year ago.

This table highlights how DVA is growing vs broader market. For more details see: DVA Revenue Comparison

[3] Profitability Appears Moderate

• DVA last 12 month operating income was $1.9 Bil representing operating margin of 14.6%
• With cash flow margin of 14.2%, it generated nearly $1.9 Bil in operating cash flow over this period
• For the same period, DVA generated nearly $772 Mil in net income, suggesting net margin of about 5.8%

This table highlights how DVA profitability vs broader market. For more details see: DVA Operating Income Comparison

[4] Financial Stability Looks Weak

• DVA Debt was $13 Bil at the end of the most recent quarter, while its current Market Cap is $9.7 Bil. This implies Debt-to-Equity Ratio of 131.6%
• DVA Cash (including cash equivalents) makes up $736 Mil of $18 Bil in total Assets. This yields a Cash-to-Assets Ratio of 4.2%

[5] Downturn Resilience Is Strong

DVA has been more resilient than the S&P 500 index during various economic downturns. We assess this based on both (a) how much the stock fell and, (b) how quickly it recovered.

2022 Inflation Shock

• DVA stock fell 51.1% from a high of $133.78 on 4 August 2021 to $65.42 on 9 November 2022 vs. a peak-to-trough decline of 25.4% for the S&P 500.
• However, the stock fully recovered to its pre-Crisis peak by 5 March 2024
• Since then, the stock increased to a high of $177.35 on 4 February 2025 , and currently trades at $134.73

 
2020 Covid Pandemic

• DVA stock fell 26.6% from a high of $88.50 on 11 February 2020 to $64.99 on 20 March 2020 vs. a peak-to-trough decline of 33.9% for the S&P 500.
• However, the stock fully recovered to its pre-Crisis peak by 29 July 2020

 
2008 Global Financial Crisis

• DVA stock fell 36.4% from a high of $33.27 on 18 October 2007 to $21.17 on 20 March 2009 vs. a peak-to-trough decline of 56.8% for the S&P 500.
• However, the stock fully recovered to its pre-Crisis peak by 17 June 2010

But the risk is not limited to major market crashes. Stocks fall even when markets are good – think events like earnings, business updates, outlook changes. Read DVA Dip Buyer Analyses to see how the stock has recovered from sharp dips in the past.

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