A History of Outperforming Analyst Forecasts and Beating the Odds: DaVita Inc. (DVA)

DaVita Inc. (NYSE: DVA) stock fell -3.48% on Tuesday to $77.31 against a previous-day closing price of $80.10. With 0.61 million shares changed hands, the volume of the stock remained lighter than its average volume of 0.87 million shares. During the session, the Medical Care Facilities company that operates in wider Healthcare sector, reached to the highest price of $80.04 whereas the lowest price it dropped to was $77.12. The 52-week range on DVA shows that it touched its highest point at $124.81 and its lowest point at $65.28 during that stretch. It currently has a 1-year price target of $85.29. Beta for the stock currently stands at 0.96.

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Price Performance and Earnings:

Stock performance is one of the indicators that investors use to determine whether they will profit from a stock. The price performance of DVA was down-trending over the past week, with a drop of -2.23%, but this was up by 5.63% over a month. Three-month performance dropped to -14.09% while six-month performance fell -9.99%. The stock lost -29.33% in the past year, while it has gained 3.54% so far this year. A look at the trailing 12-month EPS for DVA yields 6.83 with Next year EPS estimates of 6.73. For the next quarter, that number is 0.91. This implies an EPS growth rate of 39.30% for this year and 7.53% for next year. EPS is expected to grow by 8.40% annually over the next five years; however, over the past five years, the company experienced an annual growth rate of 11.90%.

Float and Shares Shorts:

At present, 91.16 million DVA shares are outstanding with a float of 87.34 million shares on hand for trading. On Oct 13, 2022, short shares totaled 3.7 million, which was 4.05% higher than short shares on Sep 14, 2022. In addition to Mr. Javier J. Rodriguez as the firm’s CEO & Exec. Director, Mr. Joel Ackerman serves as its CFO & Treasurer.


Institutional Ownership:

Through their ownership of 91.27% of DVA’s outstanding shares, institutional investors have majority control over the company. Other institutions hold 62.91% of DVA, in contrast to 50.00% held by mutual funds. Shares owned by individuals account for 27.35%. As the largest shareholder in DVA with 40.06% of the stake, Berkshire Hathaway, Inc. holds 36,095,570 shares worth 36,095,570. A second-largest stockholder of DVA, The Vanguard Group, Inc., holds 5,966,877 shares, controlling over 6.62% of the firm’s shares. BlackRock Fund Advisors is the third largest shareholder in DVA, holding 3,427,764 shares or 3.80% stake. With a 1.69% stake in DVA, the Vanguard Total Stock Market Index is the largest stakeholder. A total of 1,520,050 shares are owned by the mutual fund manager. The Vanguard 500 Index Fund, which owns about 1.41% of DVA stock, is the second-largest Mutual Fund holder. It holds 1,270,359 shares valued at 94.86 million. Government Pension Fund – Global holds 1.32% of the stake in DVA, owning 1,193,049 shares worth 89.08 million.

Analysts Ratings:

Reading analyst opinions is an effective way to decide where to invest, and there are several opinions available for DVA since 7 analysts follow the stock currently. There are 0 analysts who recommend BUY ratings, while 0 suggest SELL ratings. Of the remaining analysts, 5 believe that the stock is worth HOLDING, 1 give it an OVERWEIGHT rating, and 1 thinks that it’s UNDERWEIGHT. In the same way, a target price assigned to a stock can also reveal much about its potential. With DVA analysts setting a high price target of $84.00 and a low target of $72.00, the average target price over the next 12 months is $77.20. Based on these targets, DVA could surge 8.65% to reach the target high and fall by -6.87% to reach the target low. Reaching the average price target will result in a decline of -0.14% from current levels.


EPS: Estimates vs Actual

It is also common to use earnings estimates to evaluate a firm’s growth potential and to determine trading strategy. DVA will report FY 2022 earnings on 02/09/2024. Analysts have provided yearly estimates in a range of $6.50 being high and $5.77 being low. For DVA, this leads to a yearly average estimate of $6.21. The earnings surprise of a firm occurs when the actual results change from the consensus earnings estimate. DaVita Inc. surprised analysts by -$0.32 when it reported $1.45 EPS against a consensus estimate of $1.77. The surprise factor in the prior quarter was $0.21. Based on analyst estimates, the high estimate for the next quarter is $1.02 and the low estimate is $0.73. The average estimate for the next quarter is thus $0.93.

Summary of Insider Activity:

Insiders traded DVA stock several times over the past three months with 10 Buys and 0 Sells. In these transactions, 10,497 shares were bought while 0 shares were sold. The number of buy transactions has increased to 52 while that of sell transactions has risen to 27 over the past year. The total number of shares bought during that period was 383,039 while 255,413 shares were sold.

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