DaVita (DVA) to Report Q3 Earnings: What's in the Offing?
DaVita Inc. DVA is scheduled to release third-quarter 2023 results on Nov 7, after the closing bell.
In the last reported quarter, the company’s earnings per share (EPS) of $2.08 surpassed the Zacks Consensus Estimate by 25.3%. Over the trailing four quarters, its earnings outperformed the Zacks Consensus Estimate on three occasions and lagged once, delivering an earnings surprise of 21.4%, on average.
Let’s see how things have shaped up prior to this announcement.
Factors at Play
On second-quarter 2023 earnings call in August, DaVita’s management confirmed that it witnessed an improvement in its results on the back of improvements across its treatment volume, revenue per treatment and patient care costs. Per management, DaVita has been witnessing improvements in census and treatments per day over the past few months, reflecting a better macro environment and progress in the company’s operating initiatives. This looks promising for the stock as this momentum is likely to have continued in the third quarter of 2023 and driven the quarterly revenues.
On second-quarter 2023 earnings call, management also confirmed that revenue per treatment was strong in the quarter. This was partly driven by normal expected rate increases and improvement in the mix, including Medicare Advantage. We expect this trend to have continued in the third quarter, thus driving up the revenues.
DaVita Inc. Price and EPS Surprise
DaVita Inc. price-eps-surprise | DaVita Inc. Quote
DaVita also confirmed that its other expenses, including contract labor and pharmaceuticals, continued to decline in the second quarter. We expect the costs to decline further in the to-be-reported quarter, thereby having a positive impact on the company’s performance.
DaVita’s continued pharmaceutical cost-saving initiatives from its anemia management transition to MIRCERA also look promising for its third-quarter performance.
In the second quarter, DaVita witnessed sequential improvement in U.S. dialysis treatments per day, resulting from continued census gains. We anticipate the improvement in U.S. dialysis treatments per day to have continued in the to-be-reported quarter as well, thereby boosting DaVita’s revenues.
On Apr 1, 2023, DaVita and Medtronic announced the launch of Mozarc Medical, a new independent device company focused exclusively on innovative kidney health technologies. Mozarc's current products and its research and development pipeline, from kidney access technologies to advanced home dialysis and acute therapies, are intended to improve the overall patient experience and increase access to home-based care. This raises our optimism about DaVita.
The Estimate Picture
For third-quarter 2023, the Zacks Consensus Estimate of $3.01 billion for total revenues calls for an uptick of 1.9% from the prior-year reported figure.
The consensus estimate for EPS is pegged at $1.92, indicating an improvement of 32.4% 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 below.
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 sports a Zacks Rank #1.
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.
Beam Therapeutics Inc. BEAM has an Earnings ESP of +12.93% and a Zacks Rank of 2. BEAM has an estimated long-term growth rate of 13.9%. You can see the complete list of today’s Zacks #1 Rank stocks here.
Beam Therapeutics’ earnings surpassed estimates in three of the trailing four quarters and missed once, with the average surprise being 15.8%.
Shockwave Medical, Inc. SWAV has an Earnings ESP of +6.07% and is a Zacks #1 Rank stock. SWAV has an estimated long-term growth rate of 4.6%.
Shockwave Medical’s earnings surpassed estimates in three of the trailing four quarters and missed once, with the average surprise being 81.1%.
Monte Rosa Therapeutics, Inc. GLUE has an Earnings ESP of +1.33% and a Zacks Rank of 2. GLUE has a growth rate of 1.4% for 2024.
Monte Rosa’s earnings surpassed estimates in all the trailing four quarters, with the average surprise being 3.8%.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.
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DaVita Inc. (DVA) : Free Stock Analysis Report
Beam Therapeutics Inc. (BEAM) : Free Stock Analysis Report
ShockWave Medical, Inc. (SWAV) : Free Stock Analysis Report
Monte Rosa Therapeutics, Inc. (GLUE) : Free Stock Analysis Report
