DaVita (DVA) to Report Q1 Earnings: What's in the Offing?
DaVita Inc. DVA is scheduled to release first-quarter 2022 results on May 5, after market close.
In the last reported quarter, the company’s earnings of $2.02 per share surpassed the Zacks Consensus Estimate by 12.2%. Over the trailing four quarters, its earnings outperformed the Zacks Consensus Estimate on all occasions, delivering an earnings surprise of 14.6%, on average.
Let’s see how things have shaped up prior to this announcement.
Factors at Play
In January, DaVita’s Integrated Kidney Care announced the launch of 11 value-based care programs across the United States, which are expected to reach an estimated 25,000 kidney patients. The programs' goals are to help slow the progression of chronic kidney disease and help more kidney failure patients access kidney transplants and dialysis in at home. This is expected to have boosted first-quarter revenues on the back of patient enrolment for dialysis care.
During the fourth-quarter 2021 call, DaVita confirmed that it has been registering incremental mortality due to the pandemic over the past few months. The company expects this to increase in the to-be-reported quarter, primarily on a significant uptick in infections in January.
DaVita is likely to have derived benefits from a higher final Medicare rate update and a partial extension of Medicare sequestration relief in the to-be-reported quarter. However, the possibility of registering incremental mortality as well as wage rate pressure is likely to have weighed on the company’s top line.
DaVita Inc. Price and EPS Surprise
DaVita Inc. price-eps-surprise | DaVita Inc. Quote
DaVita announced the acquisition of MedSleuth in early January. The latter’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.
In February, DaVita announced that according to a DaVita Clinical Research study, dialysis patients who received an adenovirus vector-based COVID-19 vaccine (Johnson & Johnson) were found to have similar rates of breakthrough infection, hospitalization and mortality as dialysis patients who received an mRNA-based vaccine (Pfizer/BioNTech). These developments raise optimism about the stock.
However, DaVita has been witnessing a supply shortage primarily related to dialysis, with respect to a fluid solution used in hemodialysis to filter toxins and fluid from the blood for the past few months. This is likely to have weighed on the company’s first-quarter 2022 top line.
The Estimate Picture
For first-quarter 2022, the Zacks Consensus Estimate of $2.88 billion for total revenues calls for an improvement of 2.1% from the prior-year reported figure.
The consensus estimate for earnings per share is pegged at $1.85, indicating a decline of 11.5% from the prior-year reported number.
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:
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:
Meridian Bioscience, Inc. VIVO has an Earnings ESP of +26.32% and a Zacks Rank of 2. Meridian Bioscience has an earnings yield of 5.4% compared with the industry’s 0.9%.
Meridian Bioscience’s earnings surpassed estimates in three of the trailing four quarters, with the average surprise being 9.3%. You can see the complete list of today’s Zacks #1 Rank stocks here.
Clovis Oncology, Inc. CLVS has an Earnings ESP of +2.33% and is a Zacks #2 Ranked stock. Clovis Oncology has an estimated long-term growth rate of 43.9%.
Clovis Oncology’s earnings surpassed estimates in two of the trailing four quarters, the average surprise being 1.4%.
Vertex Pharmaceuticals Incorporated VRTX has an Earnings ESP of +0.87% and is a Zacks #2 Ranked stock. Vertex Pharmaceuticals has an estimated long-term growth rate of 11.5%.
Vertex Pharmaceuticals’ earnings surpassed estimates in the trailing four quarters, the average surprise being 10%.
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Meridian Bioscience Inc. (VIVO) : Free Stock Analysis Report
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Clovis Oncology, Inc. (CLVS) : Free Stock Analysis Report
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