DVA - Embedded Expectations Analysis - 2019 05 08
DaVita Inc. (DVA:USA) currently trades near recent lows relative to UAFRS-based (Uniform) Earnings, with an 18.5x Uniform P/E. Even at these levels, the market has bullish expectations for the firm, but management may be concerned about revenue growth per treatment, treatment seasonality, and their ability to effectively fight the AB 290 bill.Specifically, management may lack confidence in their ability to manage declines in revenue per treatment, reach U.S. revenue per treatment growth guidance, and sustain reductions in CapEx spending. Moreover, they may be concerned about seasonality in treatment volumes, the population of people willing to risk dialyzing at home, and their ability to defeat the AB 290 bill. Finally, they may lack confidence in their ability to meet expectations for proceeds from self-development projects in 2019, and concerned about their ability to improve the quality of life in patients at a reduced cost.
DaVita is a healthcare provider focused on transforming care delivery to improve quality of life for patients. The company's United States dialysis business provides kidney dialysis services for patients suffering from end stage renal disease (ESRD). The company's dialysis services include outpatient hemodialysis services, hospital inpatient hemodialysis services, home-based dialysis services, ESRD laboratory services, and management services. The company's ancillary services and strategic initiatives businesses include disease management services, physician services, ESRD Seamless Care Organization joint ventures, clinical research programs, vascular access services, as well as international dialysis operations.
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