DaVita’s Valuation on September 17

DaVita (DVA) is a biotechnology company focused on the discovery, development, and commercialization of specialist medicines to cater to the medical needs in rare diseases and other specialized conditions. DaVita reported non-GAAP EPS of $1.15 on revenues of $2.9 billion, a 6.9% growth YoY (year-over-year) compared to $2.7 billion in the second quarter of 2017.

The above chart compares DaVita’s revenues and EPS since the first quarter of 2017. Let’s look now at its valuation multiples.

DaVita currently trades at a forward PE multiple of 15.2x compared to the industry average of 15.1x as of September 17. Competitors UnitedHealth Group (UNH), Fresenius Medical Care (FMS), and Mednax (MD) are trading at forward PE multiples of 18.9x, 19.1x, and 11.2x, respectively.

DaVita currently trades at a forward EV[1. enterprise value]-to-EBITDA multiple of ~10.1x, which is higher than the industry average of ~9.2x as of September 17. Competitors UnitedHealth Group (UNH), Fresenius Medical Care (FMS), and Mednax (MD) are trading at a forward EV-to-EBITDA multiple of 13.3x, 10.4x, and 10.1x, respectively.

DaVita currently trades at a forward EV-to-revenue multiple of ~1.9x, while the industry average is ~1.7x as of September 17. Competitors UnitedHealth Group (UNH), Fresenius Medical Care (FMS), and Mednax (MD) are trading at forward EV-to-revenue multiples of 1.2x, 1.9x, and 1.7x, respectively.

The SPDR S&P Health Care Services ETF (XHS) holds 2.1% of its total investments in DaVita (DVA), 2.3% in UnitedHealth Group (UNH), and 2.3% in Mednax (MD).