Services-Misc Health & Allied Services, NEC
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.
Discounted Cash Flow Valuation of Davita Inc.
Growth
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Discount
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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 |
In the chart Earnings are multiplied by this value.
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.
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% |
The average Net Margin over the past 5 years is +5.69%.
The trend of Net Margin over the past 5 years is +0.47%.
The average ROA over the past 5 years is +9.24%.
The trend of ROA over the past 5 years is +0.09%.
The average ROE over the past 5 years is +52.09%.
The trend of ROE over the past 5 years is +11.42%.
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.
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% |
The Debt/FCF trailing twelve month is 10.11.
The trend of Debt/FCF over the past 5 years is -1.08.
Graham’s Stability measure stands at 0.26.
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.
Years | 12-2016 | 12-2018 | 12-2020 | 12-2022 | Trend |
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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% |
The Revenue CAGR over the past 5 years is +1.26%.
The trend of Revenue growth rate over the past 5 years is +0.81%.
The Earnings CAGR over the past 5 years is +34.11%.
The trend of Earnings growth rate over the past 5 years is -4.82%.
The Equity CAGR over the past 5 years is -20.46%.
The trend of Equity growth rate over the past 5 years is +1.48%.
The FCF CAGR over the past 5 years is +13.7%.
The trend of FCF growth rate over the past 5 years is +1.18%.