Why DaVita Stock Popped Today

Shares of DaVita (NYSE: DVA) climbed 8.6% on Wednesday after the dialysis services company announced strong fourth-quarter 2023 results.

DaVita proves its resilience

DaVita's quarterly revenue grew 7.8% year over year to $3.15 billion, translating to adjusted (non-GAAP) earnings of $173 million, or $1.87 per share. Analysts, on average, were only expecting earnings of $1.66 per share on revenue of $3.01 billion.

DaVita also generated healthy free cash flow of $258 million during the quarter, bringing its trailing-12-month free cash flow to $1.236 billion. The company's per-share earnings were also bolstered by $286 million spent on repurchasing just over 2.9 million shares of DaVita common stock at an average price of $97.82 per share. The stock closed today at over $123 per share.

What's next for DaVita investors?

DaVita CEO Javier Rodriguez lauded the resilience of the business as it continues to rebound in the wake of the COVID-19 pandemic.

"The external challenges of recent years ultimately made us stronger, and with continued investment in our teammates, systems, and capabilities, we believe that we are well positioned for the years ahead," Rodriguez added.

For the full-year 2024, DaVita issued guidance for adjusted earnings per share in the range of $8.70 to $9.80 -- again well above consensus estimates for full-year earnings of $8.68 per share -- and for 2024 free cash flow of $900 million to $1.15 billion.

In the end, this was a straightforward quarterly beat punctuated by a solid forward earnings outlook from DaVita. Shares are simply responding in kind today.

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Steve Symington has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


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