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DaVita HealthCare (DVA) Up 13% Since Last Earnings Report: Can It Continue?
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It has been about a month since the last earnings report for DaVita HealthCare (DVA - Free Report) . Shares have added about 13% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is DaVita HealthCare due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
DaVita Q2 Earnings & Revenues Top Estimates, Margins Up
DaVita delivered adjusted earnings per share of $2.59 in the second quarter of 2024, up 24.5% year over year. The figure topped the Zacks Consensus Estimate by 4.9%.
GAAP earnings per share for the quarter was $2.50, reflecting a surge of 30.9% year over year.
Revenues in Detail
Revenues of $3.19 billion in the second quarter increased 6.2% year over year. The figure surpassed the Zacks Consensus Estimate by 0.7%.
Per management, the revenue uptick primarily resulted from a seasonal improvement from patients meeting their co-insurance and deductibles and normal annual rate increases. However, this was partially offset by unfavorable changes in the payor mix.
Segment Details
DaVita generates revenues via two sources — Dialysis patient service revenues and Other revenues.
The dialysis patient service revenues were $3.06 billion, up 5.9% year over year.
Other revenues were $125.6 million, up 14.5% from the year-ago quarter’s figure.
Per management, the total U.S. dialysis treatments for the second quarter were 7,265,444 or 93,147 per day, on average. This represents a per-day increase of 1.1% on a sequential basis. Normalized non-acquired treatment growth in the second quarter of 2024 was 0.4% year over year.
As of Jun 30, 2024, DaVita provided dialysis services to around 265,100 patients at 3,124 outpatient dialysis centers, of which 2,672 were U.S. centers while 452 were located across 13 other countries.
During the second quarter of 2024, the company acquired and opened a total of 10 and closed three dialysis centers in the United States. It also acquired 24 dialysis centers, opened three and closed two dialysis centers outside the United States in the same period.
As of Jun 30, DaVita had approximately 71,300 patients in risk-based integrated care arrangements in its IKC business, representing $5.4 billion in annualized medical spend. The company also had an additional 15,200 patients in other integrated care arrangements.
Margin Details
In the quarter under review, DaVita’s gross profit rose 10.6% to $1.04 billion. The gross margin expanded 129 basis points (bps) to 32.8%.
General & administrative expenses climbed 1.1% to $367.8 million.
Adjusted operating profit totaled $676.6 million, reflecting a 16.5% uptick from the prior-year quarter’s level. Adjusted operating margin in the second quarter expanded 188 bps to 21.2%.
Financial Position
DaVita exited second-quarter 2024 with cash and cash equivalents and short-term investments of $437.2 million compared with $355.7 million at the first-quarter end. Total debt (including the current portion) at the end of second-quarter 2024 was $8.99 billion compared with $9.13 billion at the first-quarter end.
Cumulative net cash provided by operating activities at the end of second-quarter 2024 was $664 million compared with $912.7 million a year ago.
2024 Guidance
DaVita has upped its adjusted earnings per share outlook for 2024.
Adjusted earnings per share for the full year is now projected to be in the range of $9.25-$10.05, upped from the previous expectations of $9.00-$9.80. The Zacks Consensus Estimate currently stands at $9.62.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended upward during the past month.
VGM Scores
At this time, DaVita HealthCare has an average Growth Score of C, however its Momentum Score is doing a lot better with an A. Following the exact same course, the stock was allocated a grade of A on the value side, putting it in the top 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise DaVita HealthCare has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months.
Performance of an Industry Player
DaVita HealthCare belongs to the Zacks Medical - Outpatient and Home Healthcare industry. Another stock from the same industry, Encompass Health (EHC - Free Report) , has gained 10.1% over the past month. More than a month has passed since the company reported results for the quarter ended June 2024.
Encompass Health reported revenues of $1.3 billion in the last reported quarter, representing a year-over-year change of +9.6%. EPS of $1.11 for the same period compares with $0.95 a year ago.
For the current quarter, Encompass Health is expected to post earnings of $0.94 per share, indicating a change of +9.3% from the year-ago quarter. The Zacks Consensus Estimate has changed -0.1% over the last 30 days.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for Encompass Health. Also, the stock has a VGM Score of A.
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DaVita HealthCare (DVA) Up 13% Since Last Earnings Report: Can It Continue?
It has been about a month since the last earnings report for DaVita HealthCare (DVA - Free Report) . Shares have added about 13% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is DaVita HealthCare due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
DaVita Q2 Earnings & Revenues Top Estimates, Margins Up
DaVita delivered adjusted earnings per share of $2.59 in the second quarter of 2024, up 24.5% year over year. The figure topped the Zacks Consensus Estimate by 4.9%.
GAAP earnings per share for the quarter was $2.50, reflecting a surge of 30.9% year over year.
Revenues in Detail
Revenues of $3.19 billion in the second quarter increased 6.2% year over year. The figure surpassed the Zacks Consensus Estimate by 0.7%.
Per management, the revenue uptick primarily resulted from a seasonal improvement from patients meeting their co-insurance and deductibles and normal annual rate increases. However, this was partially offset by unfavorable changes in the payor mix.
Segment Details
DaVita generates revenues via two sources — Dialysis patient service revenues and Other revenues.
The dialysis patient service revenues were $3.06 billion, up 5.9% year over year.
Other revenues were $125.6 million, up 14.5% from the year-ago quarter’s figure.
Per management, the total U.S. dialysis treatments for the second quarter were 7,265,444 or 93,147 per day, on average. This represents a per-day increase of 1.1% on a sequential basis. Normalized non-acquired treatment growth in the second quarter of 2024 was 0.4% year over year.
As of Jun 30, 2024, DaVita provided dialysis services to around 265,100 patients at 3,124 outpatient dialysis centers, of which 2,672 were U.S. centers while 452 were located across 13 other countries.
During the second quarter of 2024, the company acquired and opened a total of 10 and closed three dialysis centers in the United States. It also acquired 24 dialysis centers, opened three and closed two dialysis centers outside the United States in the same period.
As of Jun 30, DaVita had approximately 71,300 patients in risk-based integrated care arrangements in its IKC business, representing $5.4 billion in annualized medical spend. The company also had an additional 15,200 patients in other integrated care arrangements.
Margin Details
In the quarter under review, DaVita’s gross profit rose 10.6% to $1.04 billion. The gross margin expanded 129 basis points (bps) to 32.8%.
General & administrative expenses climbed 1.1% to $367.8 million.
Adjusted operating profit totaled $676.6 million, reflecting a 16.5% uptick from the prior-year quarter’s level. Adjusted operating margin in the second quarter expanded 188 bps to 21.2%.
Financial Position
DaVita exited second-quarter 2024 with cash and cash equivalents and short-term investments of $437.2 million compared with $355.7 million at the first-quarter end. Total debt (including the current portion) at the end of second-quarter 2024 was $8.99 billion compared with $9.13 billion at the first-quarter end.
Cumulative net cash provided by operating activities at the end of second-quarter 2024 was $664 million compared with $912.7 million a year ago.
2024 Guidance
DaVita has upped its adjusted earnings per share outlook for 2024.
Adjusted earnings per share for the full year is now projected to be in the range of $9.25-$10.05, upped from the previous expectations of $9.00-$9.80. The Zacks Consensus Estimate currently stands at $9.62.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended upward during the past month.
VGM Scores
At this time, DaVita HealthCare has an average Growth Score of C, however its Momentum Score is doing a lot better with an A. Following the exact same course, the stock was allocated a grade of A on the value side, putting it in the top 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise DaVita HealthCare has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months.
Performance of an Industry Player
DaVita HealthCare belongs to the Zacks Medical - Outpatient and Home Healthcare industry. Another stock from the same industry, Encompass Health (EHC - Free Report) , has gained 10.1% over the past month. More than a month has passed since the company reported results for the quarter ended June 2024.
Encompass Health reported revenues of $1.3 billion in the last reported quarter, representing a year-over-year change of +9.6%. EPS of $1.11 for the same period compares with $0.95 a year ago.
For the current quarter, Encompass Health is expected to post earnings of $0.94 per share, indicating a change of +9.3% from the year-ago quarter. The Zacks Consensus Estimate has changed -0.1% over the last 30 days.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for Encompass Health. Also, the stock has a VGM Score of A.