What Happened?
Shares of dialysis provider DaVita Inc. (NYSE:DVA) fell 8.5% in the afternoon session after the company reported a decline in patient treatment volumes and lowered its full-year forecast for the key metric following its second-quarter earnings release. Although the kidney care provider posted second-quarter earnings that beat analyst estimates, investors focused on operational challenges. The company revealed U.S. patient treatment volumes dropped 1.1% year-over-year, a figure below its own projections. This weakness prompted management to lower its full-year forecast for treatment volume. Adding to the concerns, a recent cybersecurity incident cost the company $13 million and negatively affected revenue per treatment. In response to the report, Deutsche Bank also lowered its price target on the stock to $137 from $165, which further fueled the decline.
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What Is The Market Telling Us
DaVita’s shares are not very volatile and have only had 4 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was 6 months ago when the stock dropped 14% on the news that the company reported weak fourth-quarter results: DaVita narrowly exceeded analysts' revenue expectations but fell short on full-year EPS guidance. A key challenge remains patient volume, as center closures and declining patient count could continue to pressure growth. Overall, this quarter could have been better.
DaVita is down 13% since the beginning of the year, and at $130.29 per share, it is trading 26.5% below its 52-week high of $177.35 from February 2025. Investors who bought $1,000 worth of DaVita’s shares 5 years ago would now be looking at an investment worth $1,583.
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