DaVita Inc. DVA delivered adjusted earnings per share (EPS) of $2.24 in the fourth quarter of 2024, up 19.8% year over year. The figure surpassed the Zacks Consensus Estimate by 1.4%.

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GAAP EPS for the quarter was $3.09, reflecting a jump of 90.7% year over year.

Full-year 2024 adjusted EPS was $9.68, up 26.2% from the comparable 2023 period. However, the metric lagged the Zacks Consensus Estimate by 0.3%.

DaVita’s Revenues in Detail

Revenues of $3.29 billion in the fourth quarter increased 4.7% year over year. The figure topped the Zacks Consensus Estimate by 1.2%.

Per management, the revenue uptick primarily resulted from seasonal impacts (including flu vaccines) and other normal fluctuations.

Full-year 2024 revenues were $12.82 million, reflecting a 5.6% uptick from the comparable 2023 period. The metric beat the Zacks Consensus Estimate by 0.2%.

Shares of this company plunged nearly 9.4% in today’s pre-market trading.

DVA’s Segment Details

DaVita generates revenues via two sources — Dialysis patient service revenues and Other revenues.

The dialysis patient service revenues were $3.12 billion, up 4.9% year over year.

Other revenues were $175.5 million, up 1.2% from the year-ago quarter’s figure.

Per management, the total U.S. dialysis treatments for the fourth quarter were 7,278,605 or 91,786 per day, on average. This represents a per-day decrease of 1.4% on a sequential basis. Normalized non-acquired treatment declined 0.3% year over year in the fourth quarter of 2024.

As of Dec. 31, 2024, DaVita provided dialysis services to around 281,100 patients at 3,166 outpatient dialysis centers, of which 2,657 were U.S. centers while 509 were located across 13 other countries.

During the fourth quarter of 2024, the company opened one and closed five dialysis centers in the United States. It also acquired 55, opened one and closed five dialysis centers outside the United States in the same period.

As of Dec. 31, DaVita had approximately 70,400 patients in risk-based integrated care arrangements in its Integrated Kidney Care business, representing $5.5 billion in annualized medical spend. The company also had an additional 11,600 patients in other integrated care arrangements.

DaVita’s Margin Details

In the quarter under review, DaVita’s gross profit rose 6.1% year over year to $1.07 billion. The gross margin expanded 43 basis points (bps) to 32.5%.

General & administrative expenses climbed 3.2% year over year to $414.5 million.

Adjusted operating profit totaled $654.8 million, reflecting an 8.1% uptick from the prior-year quarter’s level. Adjusted operating margin in the fourth quarter expanded 61 bps to 19.9%.

DVA’s Financial Position

DaVita exited 2024 with cash and cash equivalents and short-term investments of $845.9 million compared with $391.7 million at 2023-end. Total debt (including the current portion) at the end of 2024 was $9.45 billion compared with $8.39 billion at 2023-end.

Cumulative net cash provided by operating activities at the end of 2024 was $2.02 billion compared with $2.06 billion a year ago.

DaVita’s Guidance

DaVita has initiated its adjusted EPS outlook for 2025.

Adjusted EPS for the full year is projected to be in the range of $10.20-$11.30. The Zacks Consensus Estimate currently stands at $11.24.

Our Take

DaVita ended the fourth quarter of 2024 with better-than-expected results. The uptick in the company’s overall top and bottom lines and robust segmental revenues were encouraging. The opening of dialysis centers within the United States and opening and acquiring centers overseas were promising. The expansion of both margins bodes well for the stock.

On the earnings call, management confirmed that within U.S. dialysis, DVA continued to benefit from innovation in its revenue cycle operations. Enhanced collection performance and contracting propelled higher revenue per treatment growth during the quarter. This looks promising for the stock.

However, the per-day decrease in total U.S. dialysis treatments for the fourth quarter on a sequential basis and the year-over-year decline in normalized non-acquired treatment were disappointing. Mortality and mistreatment rates remained elevated in the fourth quarter and new patient starts were negatively impacted by supply constraints of DVA’s peritoneal dialysis solutions. This raises our apprehension.

DVA’s Zacks Rank and Key Picks

DaVita currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the broader medical space that have announced quarterly results are Cardinal Health, Inc. CAH, ResMed Inc. RMD and Boston Scientific Corporation BSX.

Cardinal Health, carrying a Zacks Rank of 2 (Buy), reported second-quarter fiscal 2025 adjusted EPS of $1.93, beating the Zacks Consensus Estimate by 10.3%. Revenues of $55.26 billion outpaced the consensus mark by 0.7%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Cardinal Health has a long-term estimated growth rate of 10.7%. CAH’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 9.6%.

ResMed reported second-quarter fiscal 2025 adjusted EPS of $2.43, beating the Zacks Consensus Estimate by 5.7%. Revenues of $1.28 billion surpassed the Zacks Consensus Estimate by 1.6%. It currently carries a Zacks Rank #2.

ResMed has a long-term estimated growth rate of 16%. RMD’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 6.9%.

Boston Scientific reported fourth-quarter 2024 adjusted EPS of 70 cents, beating the Zacks Consensus Estimate by 7.7%. Revenues of $4.56 billion surpassed the Zacks Consensus Estimate by 3.5%. It currently sports a Zacks Rank #1.

Boston Scientific has a long-term estimated growth rate of 13.3%. BSX’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 8.3%.

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