DaVita (DVA): Assessing Valuation After Revenue Beat and Lowered Profit Outlook

If you have been following DaVita (DVA) lately, you know that this week’s earnings report had something for both optimists and skeptics. The company managed to slightly exceed revenue expectations, but shares slid 3.1% during the afternoon session after markets retreated, driven in part by DaVita lowering its full-year profit guidance. Operational hurdles like declining patient count and more center closures continue to create uncertainty around growth, and investors are understandably watching closely for signs that these issues might ease.

Looking at the bigger picture, DaVita’s share price has been under pressure in 2025, down more than 19% over the past year and about 11% year-to-date, even as three- and five-year returns stay solidly in positive territory. The softer pace in the past month and quarter suggests that momentum is fading, with recent downswings aligning with cautious sentiment around both industry fundamentals and the broader economy. Steady, if moderate, gains in both revenue and net income over the last twelve months have done little to offset investor worries so far.

With the stock well off its highs and the outlook clouded by operational headwinds, the key question now is whether DaVita is undervalued or if these risks are already baked into the price.

Most Popular Narrative: 13.2% Undervalued

According to the most widely followed narrative, DaVita is trading well below its estimated fair value. The narrative suggests the market may be underestimating the company’s potential for operational improvements and growth in earnings over the next few years.

Ongoing investments in technology, AI, and data analytics are driving structural cost reductions through improved operational efficiency and enhanced clinical outcomes. Management expects these initiatives to support margin improvement even in periods of flat or negative volume growth.

Curious what’s fueling these bold valuation calls? The blueprint behind that fair value rests on punchy earnings growth and margin gains tied to future tech-driven efficiency. Could this be the financial pivot DaVita needs to reverse its fortunes? The real surprise comes from how analysts are factoring in each projected catalyst. Want to know what’s under the hood?

Result: Fair Value of $153.50 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, elevated patient mortality rates and slow adoption of new clinical innovations could present challenges to the bullish outlook and undermine forecasts for earnings growth.

Find out about the key risks to this DaVita narrative.

Another View: Discounted Cash Flow

Our SWS DCF model approaches DaVita from a cash flow perspective and, like the main narrative, points to the stock being undervalued. However, could the assumptions behind projected future cash flows hold up if headwinds persist?

Look into how the SWS DCF model arrives at its fair value.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out DaVita for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Build Your Own DaVita Narrative

For those with their own perspective or who want to dig into the numbers, you can easily craft your own view in just a few minutes by using Do it your way.

A great starting point for your DaVita research is our analysis highlighting 3 key rewards and 1 important warning sign that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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