DaVita Inc (DVA, Financial) has recently been in the spotlight, drawing interest from investors and financial analysts due to its robust financial stance. With shares currently priced at $91.17, DaVita Inc has witnessed a daily gain of 3.16%, marked against a three-month change of -18.43%. A thorough analysis, underlined by the GF Score, suggests that DaVita Inc is well-positioned for substantial growth in the near future.
What Is the GF Score?
The GF Score is a stock performance ranking system developed by GuruFocus using five aspects of valuation, which has been found to be closely correlated to the long-term performances of stocks by backtesting from 2006 to 2021. The stocks with a higher GF Score generally generate higher returns than those with a lower GF Score. Therefore, when picking stocks, investors should invest in companies with high GF Scores. The GF Score ranges from 0 to 100, with 100 as the highest rank.
- Financial strength rank: 4/10
- Profitability rank: 9/10
- Growth rank: 9/10
- GF Value rank: 9/10
- Momentum rank: 9/10
Each one of these components is ranked and the ranks also have positive correlation with the long-term performances of stocks. The GF score is calculated using the five key aspects of analysis. Through backtesting, we know that each of these key aspects has a different impact on the stock price performance. Thus, they are weighted differently when calculating the total score. With a high GF Score of 92 out of 100, GuruFocus signals that DaVita Inc has the highest outperformance potential.
Understanding DaVita Inc's Business
DaVita Inc is a dominant force in the healthcare sector, particularly in the provision of dialysis services. With a market capitalization of $8.33 billion and annual sales of $11.91 billion, the company's operating margin stands at a healthy 12.13%. As the largest provider of dialysis services in the United States, DaVita Inc commands over 35% market share by both patients and clinics. The company operates more than 3,000 facilities worldwide, primarily in the U.S., treating over 240,000 patients globally each year. The majority of DaVita Inc's U.S. sales come from government payers, primarily Medicare, with commercial insurers contributing significantly to the company's profits despite representing a smaller percentage of U.S. patients.
Profitability Rank Breakdown
The Profitability Rank reflects DaVita Inc's impressive ability to generate profit compared to its peers. The company's Gross Margin has consistently risen over the past five years, with figures showing an increase from 28.14% in 2018 to a peak of 31.38% in 2021, before a slight dip to 29.29% in 2022. This trend highlights DaVita Inc's efficiency in converting revenue into profit. Additionally, the company's Predictability Rank of 3.0 stars out of five indicates a stable operational performance, which bolsters investor confidence.
Growth Rank Breakdown
DaVita Inc's high Growth Rank signifies its dedication to business expansion. The company's 3-Year Revenue Growth Rate of 17.8% surpasses 71.89% of companies in the Healthcare Providers & Services industry. Furthermore, DaVita Inc has experienced a significant increase in its EBITDA over the past few years, with a three-year growth rate of 13.5% and a five-year rate of 13.1%, emphasizing its ability to sustain growth.
Next Steps
Considering DaVita Inc's financial strength, profitability, and growth metrics, the GF Score highlights the firm's unparalleled position for potential outperformance. Investors seeking to capitalize on such robust financial health and promising growth prospects may find DaVita Inc an attractive option. For those looking to explore further, GuruFocus Premium members can discover more companies with strong GF Scores using the following screener link: GF Score Screen.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
