DaVita HealthCare (DVA) Suffers a Larger Drop Than the General Market: Key Insights

In the latest close session, DaVita HealthCare (DVA) was down 5.11% at $104.47. This change lagged the S&P 500’s 0.19% loss on the day. Meanwhile, the Dow lost 0.8%, and the Nasdaq, a tech-heavy index, lost 0.1%.

The kidney dialysis provider’s stock has dropped by 8.29% in the past month, falling short of the Medical sector’s gain of 0.48% and the S&P 500’s gain of 2.26%.

Investors will be eagerly watching for the performance of DaVita HealthCare in its upcoming earnings disclosure. It is anticipated that the company will report an EPS of $3.24, marking a 44.64% rise compared to the same quarter of the previous year. At the same time, our most recent consensus estimate is projecting a revenue of $3.53 billion, reflecting a 6.99% rise from the equivalent quarter last year.

DVA’s full-year Zacks Consensus Estimates are calling for earnings of $10.7 per share and revenue of $13.55 billion. These results would represent year-over-year changes of +10.54% and 0%, respectively.

Investors should also note any recent changes to analyst estimates for DaVita HealthCare. These recent revisions tend to reflect the evolving nature of short-term business trends. As such, positive estimate revisions reflect analyst optimism about the business and profitability.

Our research suggests that these changes in estimates have a direct relationship with upcoming stock price performance. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

The Zacks Rank system, stretching from #1 (Strong Buy) to #5 (Strong Sell), has a noteworthy track record of outperforming, validated by third-party audits, with stocks rated #1 producing an average annual return of +25% since the year 1988. Over the past month, the Zacks Consensus EPS estimate has remained steady. As of now, DaVita HealthCare holds a Zacks Rank of #3 (Hold).

In terms of valuation, DaVita HealthCare is currently trading at a Forward P/E ratio of 8.54. For comparison, its industry has an average Forward P/E of 17.68, which means DaVita HealthCare is trading at a discount to the group.

It’s also important to note that DVA currently trades at a PEG ratio of 0.68. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company’s expected earnings growth rate into account. Medical – Outpatient and Home Healthcare stocks are, on average, holding a PEG ratio of 1.73 based on yesterday’s closing prices.

The Medical – Outpatient and Home Healthcare industry is part of the Medical sector. This industry currently has a Zacks Industry Rank of 102, which puts it in the top 42% of all 250+ industries.