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DaVita (DVA) to Report Q2 Earnings: What's in the Offing?

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  • DVA

DaVita Inc. DVA is scheduled to release second-quarter 2021 results on Aug 3, after market close.

In the last-reported quarter, the company’s earnings of $2.09 surpassed the Zacks Consensus Estimate by 16.1%. Over the trailing four quarters, its earnings outperformed the Zacks Consensus Estimate on three occasions and missed the same in one, delivering an earnings surprise of 19.59%, on average.

Let’s see how things have shaped up prior to this announcement.

Factors at Play

DaVita has been registering a steady growth of daily treatment over the past few months after being offset by the pandemic-led impacts. Given the slight ebb in new infections and continued vaccine roll out, we expect the company to maintain its treatment momentum in the to-be-reported quarter, thus driving revenues.

Although it is important to mention here that second-quarter revenues are likely to be offset by continued pandemic-led higher expenses due to higher personal protective equipment (“PPE”) costs and the compounding effect of COVID-19-led patient mortality.

DaVita recorded an improvement in its U.S. dialysis revenue per treatment in the last-reported quarter on the back of various factors, with Medicare rate increase being one. The extension of the Medicare sequestration relief has been recently passed, and will be effective through the end of the year. This is expected to significantly contribute to DaVita’s second-quarter revenues.

DaVita Inc. Price and EPS Surprise

DaVita Inc. Price and EPS Surprise
DaVita Inc. Price and EPS Surprise

DaVita Inc. price-eps-surprise | DaVita Inc. Quote

The Zacks Consensus Estimate for second-quarter U.S. dialysis patient service revenues stands at $2.67 billion, which is in line with the year-ago quarter’s reported figure.

The company has been steadily making progress with its nephrology care line, which is a new physician-led entity with around 1,100 nephrologists. This, in turn, is expected to have continued to facilitate DaVita’s connection with the nephrologist practice in the second quarter, thereby contributing to top-line growth.

DaVita, in May, announced the expansion of its home kidney care program to include the HomeChoice Claria Automated Peritoneal Dialysis system enabled by Sharesource remote patient monitoring from Baxter International Inc. BAX. DaVita’s second-quarter revenues are expected to be significantly boosted by the robust adoption of its home dialysis program.

In March 2021, the company announced the extension of its collaboration with Fresenius Medical Care AG & Co. KGaA’s FMS North America wing to use the latter’s NxStage home hemodialysis machines and related technology for patients across the United States. Notably, the agreement backs both companies’ efforts to empower more people living with kidney failure to select home dialysis as an option.

Benefits of these developments are expected to get reflected in second-quarter results.

The Estimate Picture

For second-quarter 2021, the Zacks Consensus Estimate of $2.88 billion for total revenues implies a decline of 0.1% from the prior-year quarter’s reported figure.

The consensus estimate for earnings per share is pegged at $2.14, implying an improvement of 9.7% from the prior-year period’s reported number.

What Our Model Suggests

Our proven model predicts an earnings beat for DaVita this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), #2 (Buy) or #3 (Hold) increases the chances of an earnings beat.

Earnings ESP: DaVita has an Earnings ESP of +0.47%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: The company currently carries a Zacks Rank #3.

Another Stock Worth a Look

Here is another medical stock worth considering, which also has the right combination of elements to beat on earnings this reporting cycle:

Henry Schein, Inc. HSIC, which has an Earnings ESP of +0.91% and a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Baxter International Inc. (BAX) : Free Stock Analysis Report

DaVita Inc. (DVA) : Free Stock Analysis Report

Henry Schein, Inc. (HSIC) : Free Stock Analysis Report

Fresenius Medical Care AG & Co. KGaA (FMS) : Free Stock Analysis Report

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