Medical Stock Zooms Over 20% In A Single Day
It’s been really busy for investors in the stock market.
Huge companies are releasing earnings, and it feels like there’s breaking news on the war in Iran every day.
However, it’s really important to not be bogged down by the big stuff.
Don’t get me wrong… we still need to pay attention to the important things going on.
But there are plenty of smaller companies making news, and we need to pay attention.
DaVita Inc (ticker: DVA) is a healthcare company worth around $12 billion.
Specifically, DaVita provides kidney dialysis services for over 200,000 patients at outpatient centers throughout the United States.
DaVita released earnings last week and blew them away.
It reported a 40% increase in EPS for the 1st quarter compared to the same quarter in 2025.
Wall Street analysts were only expecting EPS around $2.33, so it’s a huge beat, and its stock price jumped over 23%.
DaVita is a great stock.
Over the past decade, it has averaged almost 15% growth in revenue every year.
Can it keep it up?
DaVita’s kidney dialysis is primarily used to treat end-stage renal disease (ESRD), a serious kidney disease requiring frequent dialysis and kidney transplants.
Forecasts project the ESRD market to almost quadruple over the next decade.
The growth is largely from an aging population, higher obesity rates, and more people getting diabetes.
These projections line up closely with DaVita’s historical revenue growth rate, so I don’t see a reason why it can’t continue.
Despite the recent runup in price, DaVita is still relatively cheap.
Its forward price-to-earnings (P/E) ratio, which uses next year’s earnings projections, is only 14x and lower than its industry average.
And its PEG ratio, which divides its price-to-earnings ratio by expected growth rate, is only 1.27x and also below its industry average.
Analysts are also starting to pay attention.
Deutsche Bank recently upgraded the stock to a “Buy” and raised DaVita’s price target to $220, which is 15% higher than its current stock price.
Price targets are what the analyst projects the price will be 12 months from now, and a 15% jump in one year sounds pretty good.
One other thing worth mentioning is DaVita’s famous investor.
Berkshire Hathaway, the investment company founded by Warren Buffett, owns over 30 million shares in DaVita.
It holds about 45% of DaVita’s shares, making Berkshire Hathaway the largest shareholder for the last decade.
So if you like Buffett (who doesn’t?), now is a great time to give DaVita’s stock a look.
Do you own any of Buffett’s other favorite stocks?
Coach Parker
Category: Stocks
