Davita Inc.

DVA

Services-Misc Health & Allied Services, NEC

Mkt Cap

$12.61B

PE

15.46

Debt

$9.307B

Cash

$430.8M

EV

$21.49B

FCF

$920.3M

Market Cap

$12.61B

P/E Ratio

15.46

Debt

$9.307B

Cash

$430.8M

EV

$21.49B

FCF

$920.3M

Charts data: {"Earnings":[{"time":"2014-12-30","value":723114000},{"time":"2015-12-30","value":269732000},{"time":"2016-12-30","value":879874000},{"time":"2017-12-30","value":663618000},{"time":"2018-12-30","value":159394000},{"time":"2019-12-30","value":810981000},{"time":"2020-12-30","value":773642000},{"time":"2021-12-30","value":978450000},{"time":"2022-12-30","value":560400000},{"time":"2023-12-30","value":691535000}],"Sales":[{"time":"2014-12-30","value":12795106000},{"time":"2015-12-30","value":13781837000},{"time":"2016-12-30","value":10707467000},{"time":"2017-12-30","value":10876634000},{"time":"2018-12-30","value":11404851000},{"time":"2019-12-30","value":11388479000},{"time":"2020-12-30","value":11550604000},{"time":"2021-12-30","value":11618797000},{"time":"2022-12-30","value":11609894000},{"time":"2023-12-30","value":12140147000}],"Net Margins":[{"time":"2014-12-30","value":0.05651488936473054},{"time":"2015-12-30","value":0.019571556389761394},{"time":"2016-12-30","value":0.08217386987977641},{"time":"2017-12-30","value":0.06101317742235328},{"time":"2018-12-30","value":0.013975982676143686},{"time":"2019-12-30","value":0.07121065069356496},{"time":"2020-12-30","value":0.06697848874396525},{"time":"2021-12-30","value":0.08421267709557194},{"time":"2022-12-30","value":0.04826917455060313},{"time":"2023-12-30","value":0.05696265457082192}],"Assets":[{"time":"2014-12-30","value":17942715000},{"time":"2015-12-30","value":18514875000},{"time":"2016-12-30","value":18741257000},{"time":"2017-12-30","value":18948193000},{"time":"2018-12-30","value":19110252000},{"time":"2019-12-30","value":17311394000},{"time":"2020-12-30","value":16988516000},{"time":"2021-12-30","value":17121488000},{"time":"2022-12-30","value":16928252000},{"time":"2023-12-30","value":16893578000}],"Stockholders Equity":[{"time":"2014-12-30","value":5360311000},{"time":"2015-12-30","value":5084172000},{"time":"2016-12-30","value":4849741000},{"time":"2017-12-30","value":4886066000},{"time":"2018-12-30","value":3908398000},{"time":"2019-12-30","value":2319242000},{"time":"2020-12-30","value":1566752000},{"time":"2021-12-30","value":936148000},{"time":"2022-12-30","value":875892000},{"time":"2023-12-30","value":1244062000}],"ROE":[{"time":"2014-12-30","value":0.13490150105096513},{"time":"2015-12-30","value":0.05305327986543335},{"time":"2016-12-30","value":0.18142700816394114},{"time":"2017-12-30","value":0.13581846827283953},{"time":"2018-12-30","value":0.040782438226608445},{"time":"2019-12-30","value":0.34967502313255794},{"time":"2020-12-30","value":0.49378714691284903},{"time":"2021-12-30","value":1.045187299444105},{"time":"2022-12-30","value":0.6398049074543437},{"time":"2023-12-30","value":0.5558685981888363}],"ROA":[{"time":"2014-12-30","value":0.10116311829062659},{"time":"2015-12-30","value":0.06322997049669522},{"time":"2016-12-30","value":0.10155546130123502},{"time":"2017-12-30","value":0.09660129596526698},{"time":"2018-12-30","value":0.080371153661396},{"time":"2019-12-30","value":0.0949269019005633},{"time":"2020-12-30","value":0.09975185590077439},{"time":"2021-12-30","value":0.1053499555646098},{"time":"2022-12-30","value":0.0791022014558857},{"time":"2023-12-30","value":0.09487534257100538}]}

DaVita Inc. provides kidney dialysis services for patients suffering from chronic kidney failure in the United States. The company operates kidney dialysis centers and provides related lab services in outpatient dialysis centers. It also offers outpatient, hospital inpatient, and home-based hemodialysis services; operates clinical laboratories that provide routine laboratory tests for dialysis and other physician-prescribed laboratory tests for ESRD patients; and management and administrative services to outpatient dialysis centers. In addition, the company offers integrated care and disease management services to patients in risk-based and other integrated care arrangements; clinical research programs; physician services; and comprehensive kidney care services. Further, it engages in the provision of acute inpatient dialysis services and related laboratory services; and transplant software business. The company was formerly known as DaVita HealthCare Partners Inc. and changed its name to DaVita Inc. in September 2016. DaVita Inc. was incorporated in 1994 and is headquartered in Denver, Colorado.

Sector

10-Q
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10-K
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10-K
12/31/18
10-Q
9/30/18
10-Q
6/30/18
10-Q
3/31/18
10-K
12/31/17

DCF

Discounted Cash Flow Valuation of Davita Inc.

Calculate

Growth Years

Growth

Start

End

Discount

Start

End

Multiple

g\r	+10%	+11%	+12%	+13%	+14%
0%	10	9	8	8	7
+1%	11	10	9	8	8
+2%	13	11	10	9	8
+3%	14	13	11	10	9
+4%	17	14	12	11	10

Years	0	1	2	3	4	5	6	7	8	9	10	TV
FCF	$920.3M	$975.7M	$1.033B	$1.093B	$1.155B	$1.219B	$1.286B	$1.354B	$1.425B	$1.498B	$1.573B	$15.73B
DCF		$848.4M	$781.3M	$718.7M	$660.4M	$606.2M	$555.9M	$509.1M	$465.9M	$425.8M	$388.8M	$3.888B
Value	$9.848B

Chart P/E ratio

In the chart Earnings are multiplied by this value.

Earnings Growth 5.3%

Earnings Stability 6%

Competitiveness and MOAT

High margins render the company resilient under dire circumstances, hence able to drive competitors out or acquire them. ROE and ROA measure the average flow generated by each invested dollar. Their marginal value is a forecast of future growth, and it is considered by Buffett and Munger the most important single indicator.

The Net Margin is too low to guarantee profitability in case of higher costs or higher interest rates. Furthermore lower margins cause higher earnings’ volatility.

Over time the ROA has been increasing indicating a higher marginal ROA with respect to the calculated one, giving a good sign for continued growth.

Years	12-2015	12-2016	12-2017	12-2018	12-2019	12-2020	12-2021	12-2022	12-2023	TTM
Net Margin	2%	8.2%	6.1%	1.4%	7.1%	6.7%	8.4%	4.8%	5.7%	6.6%
ROA	6.3%	10%	9.7%	8%	9.5%	10%	11%	7.9%	9.5%	10%
ROE	5.3%	18%	14%	4.1%	35%	49%	100%	64%	56%	72%

What is the average Net Margin?

The average Net Margin over the past 5 years is +5.69%.

What is the trend of Net Margin?

The trend of Net Margin over the past 5 years is +0.47%.

What is the average Return on Assets (ROA)?

The average ROA over the past 5 years is +9.24%.

What is the trend of Return on Assets (ROA)?

The trend of ROA over the past 5 years is +0.09%.

What is the average Return on Equity (ROE)?

The average ROE over the past 5 years is +52.09%.

What is the trend of Return on Equity (ROE)?

The trend of ROE over the past 5 years is +11.42%.

Safety & Stabiliy

Being debt the number one cause of investment losses and company death, the ratio Debt/FCF is of utmost importance to guarantee safety. On the other hand the Graham’s stability measures the drawdown of earnings, hence indicating the reliability of the flow generated by the company.

The company has high debt with respect to the cashflow it generates.

The Graham’s stability indicate a relevant drawdown, consider checking when it has occured and why.

Years	12-2015	12-2016	12-2017	12-2018	12-2019	12-2020	12-2021	12-2022	12-2023	TTM
Debt FCF	11.02	8.25	9.56	15.40	6.37	6.39	7.09	9.57	5.75	10.11
Debt Equity	1.84	1.93	1.96	3.09	3.58	5.32	9.77	10.50	6.89	8.22
MIN
Graham Stability	-	-	100%	26%	100%	100%	100%	66%	90%	26%

What is the Debt/FCF?

The Debt/FCF trailing twelve month is 10.11.

What is the trend of Debt/FCF?

The trend of Debt/FCF over the past 5 years is -1.08.

What is the Graham’s Stability?

Graham’s Stability measure stands at 0.26.

Growth

Growth can be dangerous when forecasting, simply projecting the current growth is in general wrong. A company passes through multiple phases, from being young and unprofitable, to the first periods of profitability and high growth, until it arrives at a period of regime with limited growth. Identifying in which phase the company is in may help forecasting.

Earnings growth has not been increasing in the past years.

Years	12-2016	12-2018	12-2020	12-2022	Trend
Revenue	1.8%	1.3%	1.7%	4.6%	0.81%
Net Income	-3.4%	34%	-3.7%	23%	-4.8%
Stockholders Equity	-18%	-20%	-7.4%	42%	1.5%
FCF	4%	14%	4.6%	55%	1.2%

What is the 5 year Revenue CAGR?

The Revenue CAGR over the past 5 years is +1.26%.

What is the trend of Revenue growth?

The trend of Revenue growth rate over the past 5 years is +0.81%.

What is the 5 year Earnings CAGR?

The Earnings CAGR over the past 5 years is +34.11%.

What is the trend of Earnings growth?

The trend of Earnings growth rate over the past 5 years is -4.82%.

What is the 5 year Equity CAGR?

The Equity CAGR over the past 5 years is -20.46%.

What is the trend of Equity growth?

The trend of Equity growth rate over the past 5 years is +1.48%.

What is the 5 year FCF CAGR?

The FCF CAGR over the past 5 years is +13.7%.

What is the trend of FCF growth?

The trend of FCF growth rate over the past 5 years is +1.18%.