Last year was a forgettable one for DaVita (DVA +21.06%) shareholders, but understandably so. The stock ended up losing 25% of its value in calendar 2025 due to a combination of a declining number of dialysis patients, subpar guidance for most of the year, uncertainty as to how much insurers were willing to continue reimbursing the company, and an embarrassing ransomware attack reported in April.
It's just possible, however, that the sellers overshot their target. As of 12:16 p.m. ET Tuesday, DaVita stock is up an impressive 20.3% in response to fourth-quarter results and full-year guidance that show more promise than problems.
Better than expected
For the three-month stretch ending in December, DaVita turned $3.62 billion in revenue into an adjusted per-share profit $3.40. That's well up from the year-earlier comparison of $2.51 per share, when the company reported revenue of just under $3.3 billion. Perhaps more important, though, both of these numbers also topped analysts' expectations.
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The foreseeable future looks brighter than expected too. DaVita says it's anticipating per-share profits of between $13.60 and $15.00 for the fiscal year now underway, well up from last year's adjusted comparison of only $10.78, and versus analysts' consensus of around $13.50 per share.
More to like than not
The dialysis treatment company's core challenges remain. Those are health insurers' never-ending efforts to keep their net reimbursement costs to a minimum, and an opportunity for people to achieve better kidney health without Davita's help than they've been able to in the past. This includes home-based dialysis options.
NYSE: DVA
Key Data Points
The degree to which these headwinds are going to take a sustained toll on DaVita's business, however, appears to have been overestimated. While it's still far from being a high-growth stock, priced at only about 10 times this year's very achievable expected per-share earnings of $13.50, DaVita is certainly a very attractive value proposition even after today's surge. Just be aware there could be some post-surge volatility that will need to be wrung out from here.
