DVA

Healthcare

DaVita

Price Chart

Market Data

Financials

XBRL · SEC EDGAR

2016–2025(10yr)

Revenue

Net Income

Free CF

Metric	FY 2016	FY 2017	FY 2018	FY 2019	FY 2020	FY 2021	FY 2022	FY 2023	FY 2024	FY 2025Latest	YoY
Revenue	$10.7B	$10.9B	$11.4B	$11.4B	$11.6B	$11.6B	$11.6B	$12.1B	$12.8B	$13.6B	+6.5%
Operating Income	$1.9B	$1.8B	$1.5B	$1.6B	$1.7B	$1.8B	$1.3B	$1.6B	$2.1B	$2.0B	-2.2%
Operating Margin	17.7%	16.7%	13.4%	14.4%	14.7%	15.5%	11.5%	13.2%	16.3%	15.0%	-1.3pp
Net Income	$879.9M	$663.6M	$159.4M	$811.0M	$773.6M	$978.5M	$560.4M	$691.5M	$936.3M	$746.8M	-20.2%
Net Margin	8.2%	6.1%	1.4%	7.1%	6.7%	8.4%	4.8%	5.7%	7.3%	5.5%	-1.8pp
Free Cash Flow	$1.1B	$1.0B	$784.5M	$1.3B	$1.3B	$1.3B	$961.1M	$1.5B	$1.5B	$1.3B	-10.6%
FCF Margin	10.6%	9.2%	6.9%	11.5%	11.3%	11.1%	8.3%	12.3%	11.4%	9.6%	-1.8pp
EPS (Diluted)	$4.29	$3.47	$0.92	$5.27	$6.31	$8.90	$5.85	$7.42	$10.73	$9.84	-8.3%

Total Debt$10.2B

Cash & Equiv.$676.4M

Net Debt$9.5B

4 min read

1. THE BIG PICTURE

DaVita is essentially a specialized infrastructure play on end-stage kidney disease, characterized by superior operational efficiency and a massive capital return program. While it leads its peer group in operating margins and buyback yield, it operates with significant financial leverage and a precarious reliance on commercial insurance rates to offset the costs of government-funded care.

2. WHERE THE RISKS HIT HARDEST

DaVita’s "industry leader" status in clinical quality is threatened by the "market basket lag" because government reimbursement increases often fail to keep pace with actual inflationary pressures. This is evident in the most recent quarter, where patient care costs per treatment rose to $279.60 (8-K). Furthermore, the "patient-centric care model" faces a structural challenge from "technological disruption," specifically the introduction of GLP-1 receptor agonists and SGLT2 inhibitors which could reduce the long-term demand for dialysis (10-K Item 1A). Finally, operational continuity is vulnerable to "supply chain disruptions" because DaVita relies on a limited number of third-party suppliers for clinical products, while its largest competitor, Fresenius, manufactures its own equipment (10-K Item 1).

3. WHAT THE NUMBERS SAY TOGETHER

DaVita is an efficiency machine that appears to be using aggressive share repurchases to compensate for sluggish top-line growth. While it ranks last among its peers in revenue growth (+6.5%), it maintains the highest operating margin in the group at 15.2% (XBRL). This efficiency allows DaVita to return 14.2% of its market cap to shareholders via buybacks—the highest yield among its peers. However, this strategy is executed alongside a heavy debt burden of $9.6 billion, resulting in 6.1x net leverage (CAPM analysis). The market remains skeptical, evidenced by a high short interest of 21.5% of the float, likely reacting to the 0.1% per-day decrease in U.S. dialysis treatments reported in the final quarter of 2025 (8-K).

4. IS IT WORTH IT AT THIS PRICE?

At 9.4x forward earnings, DaVita trades at a modest 16% discount to the peer median of 11.1x. This discount is justified by DaVita's high leverage and the looming threat of new drug therapies. At this multiple, the market is pricing in a long-term growth rate of only ~0.5% (CAPM analysis). DaVita’s fundamentals currently support a higher rate; in the most recent quarter, revenue per treatment rose by $12.01 to $422.60, suggesting DaVita can maintain margins through pricing power even as treatment volumes slightly decline. If DaVita were to achieve growth in line with the broader economy (2.5%), the sensitivity analysis suggests a justified multiple of 14.0x. The primary factor that could prevent this re-rating is the "commercial insurance mix" risk; because commercial plans pay significantly more than Medicare, any political or economic shift that reduces the percentage of commercially insured patients would disproportionately impact the bottom line.

5. WHAT WOULD CHANGE THIS VIEW?

Cautious if the "per-day decrease" in dialysis treatments accelerates beyond the current -0.1%, signaling that new drug therapies are successfully delaying the need for dialysis.
Constructive if the gap between "revenue per treatment" and "patient care costs per treatment" widens, proving that DaVita can outpace medical inflation.
Cautious if the "free cash flow" falls below the guided range of $1,000 million to $1,250 million, as this cash is vital for servicing the $9.6 billion debt load.

6. BOTTOM LINE

Structural Advantage: A dominant clinical platform with high operating margins and a massive buyback program that effectively captures value from a consolidated dialysis market. Bottom Line: DaVita is a high-leverage bet on the continued necessity of dialysis, offering value for investors who believe the market has over-priced the threat of new weight-loss drugs.

Source: Synthesis · LLM Analysis

4 min read

1. Top 5 Material Risks

Commercial Insurance Mix: A substantial portion of U.S. dialysis patient service revenues is generated from patients with commercial insurance, which pays significantly higher rates than Medicare. A decline in the percentage of these patients, driven by changes in the economic or political landscape, directly threatens profit levels.
Government Reimbursement: DaVita participates in government programs like Medicare and Medicaid, which account for a substantial portion of dialysis revenues. Changes in program funding, reimbursement rates, or the implementation of new payment provisions under the ESRD Prospective Payment System (PPS) could fail to cover costs.
Supply Chain Disruptions: DaVita relies on a limited number of third-party suppliers for critical clinical and other supplies. Disruptions due to severe weather, geopolitical instability, or macroeconomic conditions can lead to material price increases or an inability to provide dialysis services.
Labor Costs and Availability: As a labor-intensive business, DaVita faces rising labor costs and difficulties in hiring skilled clinical personnel, such as nurses. If wage pressures outpace Medicare or other rate increases, operating margins are negatively impacted.
Legal and Regulatory Matters: DaVita is subject to various lawsuits, qui tam suits, and governmental investigations. Negative outcomes, including required refunds, penalties, or changes to business practices, could have a material adverse effect on financial results and reputation.

2. Company-Specific Risks

Integrated Kidney Care (IKC) Execution: DaVita has invested substantial resources in IKC and value-based care (VBC) arrangements. Because DaVita assumes financial accountability for total patient costs, these initiatives may generate significant losses if funding terms are insufficient to cover the costs of care.
Medical Director Relationships: DaVita’s ability to operate centers depends on securing agreements with nephrologists to serve as medical directors. If these physicians cease referring patients or if DaVita cannot maintain these agreements, it would have a material adverse effect on treatment volumes.
Cybersecurity Incidents: DaVita’s operations rely on the secure processing of sensitive patient data. A cybersecurity incident, such as the one in April 2025, can result in lost revenue, increased expenses, and disruption to billing and collection cycles.
Home-Based Dialysis Infrastructure: DaVita is investing in home-based dialysis modalities, which are subject to risks related to capacity planning, training staff, and securing appropriate reimbursement, as well as potential supply chain shortages for critical home-based equipment.

3. Regulatory/Legal Risks

Anti-Kickback and Fraud Statutes: DaVita’s joint venture arrangements and medical director agreements are subject to federal and state anti-kickback statutes and other fraud and abuse laws. If these are found to violate regulations, DaVita could face severe penalties or exclusion from government programs.
Data Interoperability and Privacy: Failure to comply with HIPAA, HITECH, or evolving data interoperability and information blocking regulations could result in fines, sanctions, and an inability to scale integrated care businesses.
State-Level Initiatives: Various states have proposed or implemented initiatives to limit payments to dialysis providers, impose burdensome operational requirements, or prescribe wage levels, which could make certain centers economically unviable.
Charitable Premium Assistance: Legislative or regulatory efforts to restrict the ability of patients to utilize charitable premium assistance for insurance premiums could reduce the number of patients covered by commercial insurance.

4. Financial Impact Map

Commercial Insurance Mix → Net Income / U.S. Dialysis Patient Service Revenues → Commercial payors generate nearly all of DaVita's profit and all non-acute dialysis profits. Government Reimbursement → U.S. Dialysis Patient Service Revenues → Medicare ESRD PPS bundled payments are subject to adjustments that may not cover costs. Supply Chain Disruptions → Operating Expenses / Cost of Services → Disruptions lead to material price increases and increased expenses to maintain continuity of care. Labor Costs → Operating Expenses / Labor Costs → Increased compensation levels and clinical staffing shortages can outpace Medicare rate increases. Legal and Regulatory Matters → Operating Expenses / Legal Reserves → Potential for substantial financial penalties, awards, or required refunds to government payors.

Source: 10-K Item 1A · LLM Analysis

Recent Filings

Form	Filed	Period
10-K	Feb 2026	Dec 2025
8-K	Feb 2026	—
10-Q	Oct 2025	Sep 2025