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DaVita HealthCare (DVA) Outpaces Stock Market Gains: What You Should Know

Zacks Equity Research

DaVita HealthCare (DVA) closed at $79.47 in the latest trading session, marking a +0.61% move from the prior day. The stock outpaced the S&P 500's daily gain of 0.39%. At the same time, the Dow added 0.17%, and the tech-heavy Nasdaq gained 0.34%.

Prior to today's trading, shares of the kidney dialysis provider had gained 7.11% over the past month. This has outpaced the Medical sector's gain of 2.2% and the S&P 500's gain of 4.73% in that time.

DVA will be looking to display strength as it nears its next earnings release. The company is expected to report EPS of $1.66, up 84.44% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $2.92 billion, up 3.38% from the year-ago period.

It is also important to note the recent changes to analyst estimates for DVA. These revisions typically reflect the latest short-term business trends, which can change frequently. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Over the past month, the Zacks Consensus EPS estimate remained stagnant. DVA is currently sporting a Zacks Rank of #3 (Hold).

Investors should also note DVA's current valuation metrics, including its Forward P/E ratio of 14.2. This valuation marks a discount compared to its industry's average Forward P/E of 31.11.

Meanwhile, DVA's PEG ratio is currently 0.62. 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. The Medical - Outpatient and Home Healthcare industry currently had an average PEG ratio of 2.59 as of yesterday's close.

The Medical - Outpatient and Home Healthcare industry is part of the Medical sector. This industry currently has a Zacks Industry Rank of 92, which puts it in the top 37% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on Zacks.com.


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