We got here throughout a bullish thesis on DaVita Inc. on Worth investing subreddit by AvocadoCorrect9725. On this article, we’ll summarize the bulls’ thesis on DVA. DaVita Inc.’s share was buying and selling at $140.36 as of August 22nd. DVA’s trailing and ahead P/E have been 13.83 and 12.89 respectively based on Yahoo Finance.
hywards/Shutterstock.com
DaVita Inc. (DVA) is a number one supplier of dialysis companies within the U.S., serving an getting old inhabitants with kidney illnesses. The corporate operates inside a duopoly domestically and is increasing internationally, providing dialysis each at clinics and at house. Its enterprise is extremely resilient, as sufferers require dialysis a number of occasions per week, creating a gradual, predictable money stream. DaVita’s pricing energy and significant service provision make it a high-moat enterprise, mirrored in Berkshire Hathaway’s 44% possession. Latest gross sales by Berkshire are primarily tied to a share repurchase settlement, which mandates that DaVita purchase again shares when possession exceeds 45%.
The key catalyst for DaVita over 2025-2026 is its aggressive share buyback program. The corporate has a powerful historical past of repurchasing shares, with 90 million purchased in 2022 and 71 million lately. In August 2025, the board approved an extra $2 billion for buybacks, bringing the whole to $4 billion, roughly 40% of market capitalization. On the present tempo of 1.45 million shares repurchased per thirty days, this system might conclude in roughly 1.6 years, doubtlessly decreasing the share depend to 43 million by 2027. This discount might increase EPS from $10.77 to $17.96, a 70% enhance, with out factoring in continued income development, which has averaged 6% year-over-year.
Dangers embrace the corporate’s leverage, though current refinancing is anticipated to cut back curiosity bills, and heavy reliance on Medicare and Medicaid, the place coverage adjustments might have an effect on reimbursements. Nevertheless, given the important nature of dialysis, demand is unlikely to say no, making DaVita a resilient, long-term funding with substantial upside from share repurchases.
Beforehand we lined a bullish thesis on DaVita Inc. (DVA) by Isaac459 in February 2025, which highlighted the potential for improved natural quantity development pushed by declining mortality charges amongst dialysis sufferers. The corporate’s inventory worth has depreciated roughly by 18.35% since our protection. The thesis nonetheless stands as DaVita stays a high-moat, vital healthcare supplier. AvocadoCorrect9725 shares the same perspective however emphasizes aggressive share buybacks as the important thing catalyst for future EPS development.
