DaVita may be undervalued with mixed growth prospects, but the 7 analysts following the company give it an rating of hold. Their target prices range from $123.5 to $169.0 per share, for an average of $145.07. At today's price of $138.54, DaVita is trading -4.5% away from its average target price, suggesting there is an analyst consensus of some upside potential for the stock.
DaVita Inc. provides kidney dialysis services for patients suffering from chronic kidney failure in the United States. Based in Denver, CO, the Large-Cap Health Care company has 70,000 full time employees. DaVita has not offered a regular dividend during the last year.
DaVita has a trailing twelve month P/E ratio of 15.7, compared to an average of 30.21 for the Health Care sector. Considering its EPS guidance of $10.21, the company has a forward P/E ratio of 13.6.
DaVita is overpriced compared to its book value, since its P/B ratio of 13.12 is higher than the sector average of 4.08. The company's shares are currently 218.5% below their Graham number, indicating that its shares have a margin of safety.
If analysts are willing to give the company a bad rating despite its potentially attractive valuation, its likely that they are concered by DaVita's lacking growth potential, as signaled by its 1.3% rate of revenue growth, and capital expenditures that are only growing at -8.3% on average each year.
| 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | |
|---|---|---|---|---|---|---|
| Revenue (M) | $11,405 | $11,388 | $11,551 | $11,619 | $11,610 | $12,140 |
| Operating Margins | 13% | 14% | 15% | 15% | 12% | 13% |
| Net Margins | 3% | 7% | 7% | 8% | 5% | 6% |
| Net Income (M) | $333 | $811 | $774 | $978 | $560 | $692 |
| Net Interest Expense (M) | $487 | $444 | $304 | $285 | $357 | $399 |
| Depreciation & Amort. (M) | $591 | $615 | $630 | $681 | $733 | $745 |
| Diluted Shares (M) | 172 | 154 | 123 | 110 | 96 | 93 |
| Earnings Per Share | $1.93 | $5.27 | $6.31 | $8.9 | $5.85 | $7.42 |
| EPS Growth | n/a | 173.06% | 19.73% | 41.05% | -34.27% | 26.84% |
| Avg. Price | $68.71 | $57.95 | $86.08 | $115.59 | $105.8 | $138.54 |
| P/E Ratio | 37.55 | 11.9 | 13.97 | 12.93 | 18.18 | 18.11 |
| Free Cash Flow (M) | $785 | $1,306 | $1,304 | $1,289 | $961 | $1,491 |
| CAPEX (M) | $987 | $767 | $675 | $641 | $603 | $568 |
| EV / EBITDA | 10.53 | 7.37 | 7.99 | 8.51 | 9.11 | 8.75 |
| Total Debt (M) | $10,102 | $8,108 | $8,086 | $8,908 | $8,924 | $8,392 |
| Net Debt / EBITDA | 4.62 | 3.1 | 3.34 | 3.41 | 4.19 | 3.41 |
| Current Ratio | 1.72 | 1.56 | 1.27 | 1.32 | 1.2 | 1.19 |
