Value
7.1/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 6.3 |
| P/S | 9.7 |
| EV/EBITDA | 5.9 |
| Fwd P/E | 8.9 |
| PEG | 9.0 |
| Analyst target | 3.0 |
- ▸Forward P/E: 12.4x
- ▸PEG: 0.66
- ▸Attractively valued
DVA · Why this verdict
Why DaVita (DVA) is rated HOLD
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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VerdictHOLD
Overall score5.6/10
ConfidenceMEDIUM
MacroNEUTRAL
TrendMatrix Research · core thesis
Engine thesis — one sentence
DaVita delivers consistent earnings beats and strong cash generation, but the stock has moved above analyst consensus targets and carries concentrated exposure to government reimbursement programs representing roughly two-thirds of revenue; the setup favors waiting for a pullback that restores a more favorable entry.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
Approximately 68% of revenue derives from government-based programs including Medicare and Medicare Advantage, meaning any adverse policy change or reimbursement-rate adjustment by government payers could have a disproportionately large impact on profitability. Bear case | Government-based program revenue mix declines below 65% as commercial payer relationships expand over the next 12 months. | →Stable |
| CounterThree beats in the last four quarters — including a 23% positive surprise in the most recent period — demonstrate the company is navigating the current reimbursement environment effectively, and the concentration risk may already be reflected in investor expectations. | ||
Three earnings beats in the last four quarters — including a 23% positive surprise in the most recent reporting period — combined with upward-trending analyst estimates suggest the company is consistently outperforming expectations and building a constructive earnings trajectory. Earnings | The company delivers at least one additional earnings beat in the next two reporting periods, sustaining the positive surprise pattern. | →Stable |
| CounterThe single miss in the last four quarters came in at roughly 21% below estimates, demonstrating that earnings can disappoint sharply; a repeat, particularly in a name carrying 15% short interest, could trigger an outsized negative reaction. | ||
At $209.75, the stock is trading above the analyst consensus target of $207.56, meaning the near-term risk/reward geometry is unfavorable; the setup suggests patience rather than initiating new exposure at current prices. Warnings | Analyst consensus price targets rise above $230 within two quarterly revision cycles following continued earnings beats, restoring meaningful positive upside. | →Stable |
| CounterStrong technical momentum — golden cross, price above all key moving averages, RSI at 68, and rising on-balance volume — suggests institutional buyers continue to push the stock higher and that consensus targets may be stale rather than a binding ceiling. | ||
Free cash flow converts at approximately 128% of net income and the Piotroski F-Score of 7 out of 9 reflects a financially healthy balance sheet; the cash generation quality provides a buffer against potential reimbursement headwinds. Quality breakdown | FCF-to-net-income conversion ratio stays above 100% for the next four quarters, confirming that cash generation remains resilient. | →Stable |
| CounterGross margins score among the weakest components of the quality assessment; if reimbursement conditions tighten, the FCF conversion advantage could narrow quickly, limiting the financial buffer the current quality metrics appear to provide. | ||
Approximately 68% of revenue derives from government-based programs including Medicare and Medicare Advantage, meaning any adverse policy change or reimbursement-rate adjustment by government payers could have a disproportionately large impact on profitability.
→StableBear case
- Expectation
- Government-based program revenue mix declines below 65% as commercial payer relationships expand over the next 12 months.
CounterThree beats in the last four quarters — including a 23% positive surprise in the most recent period — demonstrate the company is navigating the current reimbursement environment effectively, and the concentration risk may already be reflected in investor expectations.
Three earnings beats in the last four quarters — including a 23% positive surprise in the most recent reporting period — combined with upward-trending analyst estimates suggest the company is consistently outperforming expectations and building a constructive earnings trajectory.
→StableEarnings
- Expectation
- The company delivers at least one additional earnings beat in the next two reporting periods, sustaining the positive surprise pattern.
CounterThe single miss in the last four quarters came in at roughly 21% below estimates, demonstrating that earnings can disappoint sharply; a repeat, particularly in a name carrying 15% short interest, could trigger an outsized negative reaction.
At $209.75, the stock is trading above the analyst consensus target of $207.56, meaning the near-term risk/reward geometry is unfavorable; the setup suggests patience rather than initiating new exposure at current prices.
→StableWarnings
- Expectation
- Analyst consensus price targets rise above $230 within two quarterly revision cycles following continued earnings beats, restoring meaningful positive upside.
CounterStrong technical momentum — golden cross, price above all key moving averages, RSI at 68, and rising on-balance volume — suggests institutional buyers continue to push the stock higher and that consensus targets may be stale rather than a binding ceiling.
Free cash flow converts at approximately 128% of net income and the Piotroski F-Score of 7 out of 9 reflects a financially healthy balance sheet; the cash generation quality provides a buffer against potential reimbursement headwinds.
→StableQuality breakdown
- Expectation
- FCF-to-net-income conversion ratio stays above 100% for the next four quarters, confirming that cash generation remains resilient.
CounterGross margins score among the weakest components of the quality assessment; if reimbursement conditions tighten, the FCF conversion advantage could narrow quickly, limiting the financial buffer the current quality metrics appear to provide.
Per-dimension breakdown
Quality
6.0/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 10.0 |
| ROA | 5.0 |
| Gross margin | 2.5 |
| Op margin | 5.5 |
| Net margin | 2.8 |
| Current ratio | 5.3 |
| FCF quality | 9.3 |
| Moat | 5.4 |
| Piotroski F | 7.8 |
- ▸Excellent ROE: 81%
- ▸Excellent cash conversion: 128% FCF/NI
- ▸No competitive moat
- ▸Strong Piotroski F-Score: 7/9
Growth
7.0/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 4.0 |
| EPS growth | 10.0 |
Momentum
6.3/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 3.8 |
| MACD | 8.5 |
| OBV | 10.0 |
| MA position | 9.0 |
| Volume | 0.0 |
- ▸Overbought (RSI 85)
- ▸Volume accumulation (rising OBV)
- ▸Above 200-day MA
Sentiment
4.8/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 5.0 |
| Price target | 3.7 |
| erm sentiment | 5.8 |
Insider
3.0/10data confidence 75%| Component | Sub-score |
|---|---|
| materiality | 2.0 |
| insider conviction | 2.0 |
| holder change | 5.1 |
- ▸Heavy insider selling — $200,133,610 (1.464% of mkt cap)
Peer rank
4.3/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 5.2 |
| quality rank | 7.6 |
| growth rank | 4.4 |
- ▸Superior ROE vs peers
Technical
4.7/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 1.9 |
| support resistance | 1.1 |
| 52w position | 9.7 |
| gap | 6.0 |
Risk (lower is worse)
4.6/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 2.6 |
| days to cover | 6.0 |
| volatility | 6.2 |
| put call | 5.3 |
| implied vol | 6.2 |
| max pain risk | 3.0 |
| beta | 7.6 |
| debt equity | 0.0 |
- ▸Above max pain $65
- ▸Concentration risks: 2 HIGH, 1 MED (10-K Item 1A — sized via position_sizing, validated via buy_confidence)
Catalyst
5.7/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 6.5 |
| earnings history | 6.7 |
| earnings timing | 5.0 |
| surprise avg | 4.5 |
- ▸Strong earnings: 3B/1M
How the verdict was assembled
Engine trigger
Multiple concerning factors. Consider reducing position. | News modifier +1 (SELL_IF_HOLDING → HOLD_IF_HOLDING).
Engine technical detail
verdict_path:
L4:PATH_F_SELL|L3:NEWS_MOD=+1Passed (7)
- MOMENTUM:6.3>=5.5
- INSIDER:OK
- 8K:CLEAN
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:41d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- ASYMMETRY:-1.7=NEGATIVE
Warning (0)
none
Reward-to-Risk
-1.71
Upside
-20.6%
Downside
12.1%
Sizing output
AVOID
SetupUNKNOWN — No clear chart pattern; technical signals are mixed
EdgeNO_EDGE — No clear edge identified
SuitabilityMODERATE — Balanced profile
Investment implication
The F-path SELL output reflects an overall score of 4.1 below the 5.4 soft trigger — multiple weakening dimensions accumulated rather than a single hard-floor breach. The strongest dimension ( Value at 7.1) was not enough to lift the adjusted overall above the threshold. Co-occurring failed gates ( ASYMMETRY:-1.7=NEGATIVE) reinforce the read. Current asymmetry R:R is -1.71 — supplementary context, not the trigger for this path.
The strongest dimensions are Value at 7.1, Growth at 7.0, and Momentum at 6.3; the weakest are Insider at 3.0, Peer rank at 4.3, and Risk (lower is worse) at 4.6. The V9 engine flagged 1 failed gate, producing an asymmetric reward-to-risk of -1.71 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Approximately 68% of revenue derives from government-based programs including Medicare and Medicare Advantage, meaning any adverse policy change or reimbursement-rate adjustment by government payers could have a disproportionately large impact on profitability.
Trip ifGovernment-based program revenue falls below 60% of total revenue for 2 consecutive reporting periods.
- P2Three earnings beats in the last four quarters — including a 23% positive surprise in the most recent reporting period — combined with upward-trending analyst estimates suggest the company is consistently outperforming expectations and building a constructive earnings trajectory.
Trip ifEPS surprise falls below 0% for 2 consecutive quarters, ending the recent beat cadence.
- P3At $209.75, the stock is trading above the analyst consensus target of $207.56, meaning the near-term risk/reward geometry is unfavorable; the setup suggests patience rather than initiating new exposure at current prices.
Trip ifAnalyst consensus price target rises above $235 within 4 quarterly revision cycles, restoring more than 12% upside from current price.
- P4Free cash flow converts at approximately 128% of net income and the Piotroski F-Score of 7 out of 9 reflects a financially healthy balance sheet; the cash generation quality provides a buffer against potential reimbursement headwinds.
Trip ifFCF-to-net-income conversion ratio falls below 80% for 2 consecutive quarters.