DAVITA Inc’s Q4 2022 Earnings Highlight Increased Interest Expenses and Debt Load
March 2, 2023
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DAVITA ($NYSE:DVA) Inc., one of the largest kidney dialysis providers in the United States, recently reported its Q4 earnings for 2022 and the results have been mixed. According to Yannick Frey in his article on Seeking Alpha, the company showcased strong operating results but has seen an increase in its debt and resulting interest expenses.
However, Davita’s net income and cash flow were both down due to the company’s increased debt burden. As Frey points out in his article, the increased debt load and resulting interest expenses could create challenges for Davita’s long-term performance. These factors will likely continue to weigh on the company’s stock performance as investors remain concerned about the company’s overall health and balance sheet moving forward. Overall, Davita’s Q4 2022 earnings did not meet analysts’ expectations and it is clear that the company’s increased debt load and resulting interest expenses played a major factor in this result.
Price History
On Tuesday, DAVITA Inc. reported its earnings for Q4 2022, which showed a high interest expense and debt load. The news was mostly positive overall, though the stock only marginally declined by 0.7% from the prior closing price of $82.8, opening at $82.2 and closing at $82.3. This was likely due to the fact that the company had already adjusted its market prices prior to the release of its financials. The company has been making strides in increasing its efficiency and reducing costs, though its debt load still continues to be an issue to keep an eye on. Live Quote…
About the Company
Income Snapshot
Below shows the total revenue, net income and net margin for Davita Inc. More…
| Total Revenues | Net Income | Net Margin |
| 11.61k | 560.4 | 4.7% |
Cash Flow Snapshot
Below shows the cash from operations, investing and financing for Davita Inc. More…
| Operations | Investing | Financing |
| 1.56k | -630.35 | -1.12k |
Balance Sheet Snapshot
Below shows the total assets, liabilities and book value per share for Davita Inc. More…
| Total Assets | Total Liabilities | Book Value Per Share |
| 16.93k | 14.7k | 5.91 |
Key Ratios Snapshot
Some of the financial key ratios for Davita Inc are shown below. More…
| 3Y Rev Growth | 3Y Operating Profit Growth | Operating Margin |
| 0.6% | -9.2% | 11.4% |
| FCF Margin | ROE | ROA |
| 8.3% | 132.9% | 4.9% |
Analysis
At GoodWhale, we conducted an analysis of Davita Inc’s financials and concluded that the company has a high health score of 8/10 with regard to its cashflows and debt. This indicates that Davita Inc is capable of sustaining future operations through times of crisis. Further, Davita Inc is strong in terms of profitability but weak in terms of asset, dividend, and growth. Overall, Davita Inc is classified as an ‘elephant’, a type of company that is rich in assets after deducting off liabilities. Given the high health score of Davita Inc, investors who are looking for strong returns on their investments may be attracted to this company. Furthermore, investors who are looking for stability through times of crisis may also be drawn to Davita Inc due to its high health score and its ability to weather difficult financial times. There may also be potential for investors who want to benefit from long-term growth and dividend opportunities, even though these aspects are currently weak for Davita Inc. All in all, the financial strength and stability of Davita Inc makes it an attractive proposition for investors seeking strong returns with added security. More…
Peers
In the dialysis industry, DaVita Inc. competes with Acadia Healthcare Co Inc, Fresenius Medical Care AG & Co. KGaA, Medical Facilities Corp, and other companies. The company has a network of 2,664 outpatient dialysis centers in the United States that serve approximately 198,000 patients with end-stage renal disease.
– Acadia Healthcare Co Inc ($NASDAQ:ACHC)
Acadia Healthcare Company, Inc. is a provider of behavioral healthcare services. It operates a network of behavioral healthcare facilities in the United States, Puerto Rico, and the United Kingdom. The company offers inpatient psychiatric and substance abuse services, residential treatment, outpatient behavioral health services, and specialty behavioral healthcare services.
– Fresenius Medical Care AG & Co. KGaA ($LTS:0H9X)
Fresenius Medical Care AG & Co. KGaA, a renal care company, provides products and services for patients with renal diseases worldwide. The company’s products and services include dialysis machines, dialyzers, and related disposable products, as well as renal pharmaceuticals. It also offers clinical laboratory testing services. The company was founded in 1912 and is headquartered in Bad Homburg vor der Höhe, Germany.
– Medical Facilities Corp ($TSX:DR)
Medical Facilities Corporation is a leading operator of specialty surgical hospitals and ancillary services in the United States. The company owns and operates seven specialty surgical hospitals, one surgical hospital, and three surgical facilities located in Arkansas, Illinois, Louisiana, Mississippi, Oklahoma, and Texas. Medical Facilities Corporation’s hospitals offer a broad range of services, including general surgery, cardiovascular surgery, orthopedic surgery, pain management, gastroenterology, urology, and otolaryngology. The company’s hospitals are accredited by the Joint Commission on Accreditation of Healthcare Organizations and are licensed by the respective state Departments of Health.
Summary
DAVITA Inc., a leading provider of kidney care in the United States, has reported their fourth quarter earnings with a resulted increase in interest expenses and debt load. It is expected that the long-term growth prospects for DAVITA Inc. will remain strong and investors should remain cautiously optimistic.
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