Taking Stock of DaVita’s Performance

DaVita’s (DVA) two major business divisions are Kidney Care (DaVita Kidney Care) and DMG (DaVita Medical Group). The Kidney Care division includes its US dialysis and associated lab services, ancillary services, and strategic initiatives such as pharmacy services, disease management, vascular access services, and clinical research programs.

DaVita’s DMG division provides integrated healthcare delivery and management. In December 2017, DaVita entered into an equity purchase agreement with Optum to sell the division. In this series, we’ll explore DaVita’s financials and valuation along with analysts’ views on its stock.

In the third quarter, DaVita’s total revenue rose YoY (year-over-year) to $2.85 billion from $2.76 billion. Its net dialysis and related lab patient service revenue rose YoY to $2.66 billion from $2.44 billion. DaVita’s other revenue fell YoY to $188.61 million from $322.85 million.

In 2018 and 2019, DaVita is expected to generate revenues of $11.54 billion and $11.99 billion, respectively, compared to its revenue of $15.55 billion in 2017. Peers Quest Diagnostics (DGX) and Tenet Healthcare (THC) are expected to have revenues of $7.58 billion and $18.20 billion, respectively, in 2018. DaVita’s cash per share is $2.60. Quest Diagnostics and Tenet Healthcare have cash per share of $1.91 and $4.74, respectively.

Next, we’ll look at DaVita’s operational performance.