DVA - Embedded Expectations Analysis - 2020 10 06
DaVita Inc. (DVA:USA) currently trades below historical averages relative to UAFRS-based (Uniform) earnings, with a 14.6x Uniform P/E. At these levels, the market has bearish expectations for the firm, and management may have concerns about home business leadership, ESRD patients, and capital efficiency commitmentsSpecifically, management may lack confidence in their ability to execute their capital efficiency commitments, sustain home business leadership, and grow home patients with their home telehealth platform. Moreover, they may have concerns about the coronavirus impact on nonacquired treatment growth, their reliance on commercial insurance patients, and the sustainability of End-Stage Renal Disease (ESRD) patient enrollment in Medicare Advantage (MA) plans. In addition, they may lack confidence in their ability to mitigate treatment volume declines and permanently add calcimimetics to their core business. They may also lack confidence in their updated guidance metrics. Furthermore, they may be exaggerating the quality of their standards of care and the efficiency gains of cohorting centers. Finally, they may have concerns about increased seasonality because of bad debt dynamics
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.
In 2009, just as the dust was settling from the last major equity and credit market crises, we launched a boutique research firm with the intention of breaking Wall Street’s biases and broken incentives:
- GAAP and IFRS have failed to provide rules for reliable financial statement reporting
- Stock analyst recommendations are not grounded in disciplined financial analysis
- Credit agencies have been set up to grossly fail in their responsibilities to investors and the public markets
- Utter lack of willingness of major research firms to employ the the most advanced forensic analysis available
We sought to provide investors and company analysts with a source of information that changed all that.
Many years later, our business model remains because little has changed on Wall Street.
- Corporate credit ratings remain years behind the fundamental underpinnings of company performance
- Stock analysts continue to make recommendations with deeply inherent biases
- Research firms have failed to break down the walls between credit, equity, and macroeconomic research
- The governing accounting bodies have created more leeway for mis-estimates and mis-classifications as financials have become unwieldy and overwhelming
The integrity of Valens Research is founded in our disciplined processes and analytics. No “star” analysts. No corporate advisory relationships. No-nonsense opinions and recommendations.
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.