DVA · DaVita Inc.

The thesis

DaVita's earnings case improved on 29 October 2026: third-quarter adjusted earnings per share (EPS) of $3.82 beat the $3.61 estimate, and the low end of full-year guidance rose to $14.30. The case now rests on treatment growth and costs, and the fourth-quarter report with 2027 guidance, which the CFO placed in February 2027, settles it.

The report met one of the two tests in the previous note and missed the other. Guidance kept its range above the old $14.10 low end. Revenue per treatment came in at $415.25, $0.62 short of the second-quarter $415.87. The adjusted close of $194.82 on 5 November 2026 is up 6.1% over three months and 19.1% below the 52-week high of $240.96.

The narrative is maturing: dialysis pricing, volumes and Medicare rates are well known, and the fresh attention since the 29 October 2026 report has come from analyst target changes dated 2 November 2026.

Bullish and bearish views on DaVita Inc.

The bull case on DaVita Inc. (DVA), in brief: Earnings beat and guidance moved up. The bear case: Revenue per treatment missed the recovery test.

Bull case

• Earnings beat and guidance moved up. DaVita reported revenue of $3.578 billion against a $3.508 billion estimate on 29 October 2026. It lifted the low end of adjusted operating income guidance to $2,175 million from $2,150 million and kept free cash flow guidance at $1.0–$1.25 billion.
• The Medicare rate beat the proposal. CEO Javier Rodriguez said on the 29 October 2026 call that the final 2027 headline increase for large dialysis organizations is 3.5%, up 1.5 points from the proposed rule. CFO Joel Ackerman estimated the full-year net impact at 1.5% to 2%, with each 1% worth about $30 million a year.
• Kidney care profit guidance rose. Rodriguez said Integrated Kidney Care should deliver at least $65 million of adjusted operating income in 2026, at least $25 million above prior guidance. Risk-based patients reached about 80,800 at the third quarter, up from 64,900 in the second, per the 29 October 2026 release.
• Buybacks continued after the quarter. DaVita repurchased 0.6 million shares for $111 million in the third quarter and 0.5 million for $87 million from quarter-end through 27 October 2026, per the release.
• Management expects better 2027 volume. Ackerman said on 29 October 2026 that 2027 volume growth should exceed 2026 and that pharmaceutical costs should come down. A fourth quarter without the higher treatments per normalized day he also expects would count against this.

Bear case

• Revenue per treatment missed the recovery test. The $415.25 third-quarter figure rose 1.1% from a year earlier, with Ackerman citing normal rate increases offset by lower commercial mix and lower phosphate binder reimbursement. He put the Affordable Care Act-related commercial mix headwind at $40 million for 2026.
• Costs rose while revenue per treatment slipped. Patient care costs reached $280.22 per treatment, up $2.82 from the second quarter, per the 29 October 2026 release. Adjusted EPS fell to $3.82 from $4.02 in the second quarter. Ackerman said medical supply and professional liability costs ran above plan and should revert over time.
• Underlying volume growth is thin. Normalized non-acquired treatment growth was 0.4% from a year earlier. Average treatments per normalized day fell to 92,546 from 92,649 in the second quarter, and Ackerman flagged an approximately 1% fourth-quarter volume headwind from day mix.
• The 3.5% headline overstates the gain. Ackerman said 3.1 points are a drug add-on component that applies only to the first quarter and is recalculated quarterly, largely tied to the drug DefenCath. Only 40 basis points stay constant for the year.
• The federal plan targets concentration. The Department of Health and Human Services (HHS) said on 20 October 2026 that DaVita and Fresenius Medical Care control about 74% of the US dialysis market (Becker's Hospital Review). Rodriguez replied that limited competition "is not due to how we operate" and that many elements may need policy development or congressional action.
• Debt competes with buybacks. Total debt was $10.8 billion and the leverage ratio was 3.38x at 30 September 2026, against 3.37x at the second quarter and a 5.00x credit agreement maximum.

Price setup

The adjusted close of $194.82 on 5 November 2026 sits above the 22 October 2026 close of $186.10, the 11 September 2026 close of $181.55, the 9 October 2026 close of $179.25 and the 21 August 2026 low close of $173.82. Investing.com reported a 5.1% gain to $193.31 in the regular session on 29 October 2026, before the release, and a decline after hours. The 5 November 2026 close is above that pre-report level.

Analyst targets after the report are all above the last close. UBS raised its target to $287 and TD Cowen raised its target to $228, both with Buy ratings, while Barclays cut its target to $216 with an Equal-Weight rating, all on 2 November 2026. The spread between those targets reflects a real disagreement over 2027.

Crowding evidence is light. The 14-day relative strength index was 55.9 on 5 November 2026, a moderate reading, and the shares remain 19.1% below their 52-week high. The observable selling comes from Berkshire Hathaway, which DaVita buys from each quarter as needed to bring its stake back to 45%, per Ackerman on 29 October 2026. The company is retiring shares into this price range, and earnings are not due until February.

Catalysts, next 30 days

• ~30 November 2026, est.: expanded hemodialysis dialyzer rollout. Rodriguez said on 29 October 2026 that the national rollout would reach the vast majority of eligible patients in November. He expects no material net impact on adjusted operating income in 2026 or 2027, so this is an execution check.
• ~15 February 2027, est.: fourth-quarter report and 2027 guidance. Ackerman said "we'll know more in February", and no date is published. This report decides the case, and it is the one later event included here.

Elapsed catalysts

• Date not listed: investor conferences. DaVita announced on 3 November 2026 that it will take part in upcoming investor conferences. Its news-release listing gives no conference dates. (passed 3d ago)

What would change the view

A fourth-quarter report showing full-year adjusted EPS below $14.30 would break the case, as would 2027 guidance with a low end below $14.30. Either would show that the volume recovery and cost relief described on the 29 October 2026 call did not reach earnings.

Three narrower results would weaken it. Fourth-quarter treatments per normalized day at or below 92,546 would contradict Ackerman's expected uptick. Patient care costs per treatment above $280.22 would contradict his view that supply and liability costs revert. A proposed rule from the Centers for Medicare & Medicaid Services or a Federal Trade Commission action naming dialysis commercial rates or acquisitions would turn the HHS plan into a concrete constraint.

On price, a weekly close below $172 would end the thesis. That level sits under the 21 August 2026 close of $173.82, the low of the past three months' range.

What it trades with

DaVita and Fresenius Medical Care share the same federal policy exposure: Seeking Alpha reported on 20 October 2026 that both stocks fell on the HHS plan. The two also face the same Medicare dialysis rate rule. DaVita's own drivers are its commercial payor mix, its Berkshire-linked repurchases and its Integrated Kidney Care contracts, which tie part of its results to Medicare shared savings rates.