November 14, 2024
Top 10 Stock DaVita Sell Recommendation

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For each investment strategy, we provide you with more detailed analysis and our recommendation. You see the ranks of the top 10 stocks ranked by that particular investment strategy (360° View, Sentiment, Value, Growth, Safety and Combined Financial Performance).

360° View: Obermatt 360° View DaVita Sell

360 METRICS	November 14, 2024
VALUE
VALUE	19
GROWTH
GROWTH	65
SAFETY
SAFETY	26
SENTIMENT
SENTIMENT	25
360° VIEW
360° VIEW	10

ANALYSIS: With an Obermatt 360° View of 10 (better than 10% compared with alternatives), overall professional sentiment and financial characteristics for the stock DaVita are critical, mostly below average. The 360° View is based on consolidating four consolidated indicators, with three out of four indicators below average for DaVita. The consolidated Growth Rank has a good rank of 65, which means that the company experiences above-average growth momentum when looking at financial metrics such as revenue, profit, and invested capital growth, as well as stock returns. It ranks higher than 65% of competitors in the same industry. The other indicators are below average, namely the Value, Safety, and Sentiment Ranks.The Value Rank at 19 means that the share price of DaVita is on the high side compared with its peers regarding revenues, profits, and invested capital. The stock price is higher than for 81% of alternative stocks in the same industry. The consolidated Safety Rank has a riskier rank of 26, which means that the company has a riskier financing structure than 74% comparable companies when looking at the amount of its debt, its refinancing requirements, and its ability to service debt. The consolidated Sentiment Rank also has a low rank of 25, indicating professional investors are more pessimistic about the stock than for 75% of alternative investment opportunities. ...read more

RECOMMENDATION: With a consolidated 360° View of 10, DaVita is worse than 90% of all alternative stock investment opportunities based on the Obermatt Method. This means that DaVita shares are on the riskier side for investors. As only one of the consolidated Obermatt Ranks exhibits excellent performance, namely the above-average growth (Growth Rank of 65), it is a riskier stock investment proposition. Aside from the critical professional market sentiment (Sentiment Rank of 25), the company is rather risky when it comes to financing (Safety Rank of 26). The negative market view on DaVita may be due to the high stock price (low value). A growth company like this may get too expensive at one point in time. If too many investors are desperate to join the party, they may drive stock prices above reasonable levels. While it is typical for growth companies to have low value, because investors are willing to pay more for companies that are expected to have high growth, the crucial question is: how much more do you pay for the stock of DaVita compared with alternatives? You can use the following rule of thumb: The value rank shouldn’t be lower than one minus the growth rank. For example, if the growth rank is at 75, and the value rank is at 5, you should tread carefully. If the value rank is at 40, it still might be a good value (even though it is lower than 50). As market sentiment is critical, you should be careful with paying more than market-average for this stock and conduct further research into the company's future growth potential. ...read more

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Sentiment Strategy: Professional Market Sentiment for DaVita only reserved

SENTIMENT METRICS	November 14, 2024
ANALYST OPINION
ANALYST OPINION	11
OPINIONS CHANGE
OPINIONS CHANGE	11
PRO HOLDINGS
PRO HOLDINGS	85
MARKET PULSE
MARKET PULSE	30
CONSOLIDATED RANK: SENTIMENT
CONSOLIDATED RANK: SENTIMENT	25

ANALYSIS: With an Obermatt Sentiment Rank of 25 (better than 25% compared with alternatives), overall professional sentiment and engagement for the stock DaVita is below industry average. The Sentiment Rank is based on consolidating four sentiment indicators, with half the indicators below and the other half above average for DaVita. Analyst Opinions are at a rank of 11 (worse than 89% of alternative investments), which means that currently, stock research analysts tend to warn against investing in the stock of the company. Worse, Analyst Opinions Change has a rank of 11, which means that stock research experts are getting more pessimistic. It doesn't end with the analysts. Market Pulse is also low with a rank of 30, which means that the current professional news and professional social networks tend to be negative when discussing this company (more negative news than for 70% of competitors). On the upside, the Professional Investors rank is 85, which means that professional investors hold more stock in this company than in 85% of alternative investment opportunities. Pros tend to favor investing in this company. This could be due to a large company size, which could contribute to the higher share of professional investors in the company. If this is not the case, the low sentiment ranks are more challenging to explain. ...read more

RECOMMENDATION: With a consolidated Sentiment Rank of 25 (less encouraging than 75% compared with investment alternatives), DaVita has a reputation among professional investors that is below that of its competitors. Should the company be on the smaller side, the presence of professional investors could be reassuring. That would make DaVita stock something like a hidden gem. Investors should make sure with further research that this is true, because all other sentiment indicators are negative which is a sign for caution. ...read more

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Value Strategy: DaVita Stock Price Value low

VALUE METRICS	November 14, 2024
PRICE VS. REVENUES (P/S)
PRICE VS. REVENUES (P/S)	45
PRICE VS. PROFITS (P/E)
PRICE VS. PROFITS (P/E)	67
PRICE VS. CAPITAL (Market-to-Book)
PRICE VS. CAPITAL (Market-to-Book)	3
DIVIDEND YIELD
DIVIDEND YIELD	1
CONSOLIDATED RANK: VALUE
CONSOLIDATED RANK: VALUE	19

ANALYSIS: With an Obermatt Value Rank of 19 (worse than 81% compared with alternatives), DaVita shares are significantly more expensive than comparable stocks. The Value Rank is based on consolidating four value indicators, with three out of four indicators below average for DaVita. Only Price-to-Profit (also referred to as price-earnings, P/E) indicates good stock value with a rank of 67, which means that the stock price compared with what market professionals expect for future profits is lower than for 67% of comparable companies, indicating a good value concerning DaVita's profit levels. But Price-to-Sales is 45 which means that the stock price compared with what market professionals expect for future profits is higher than for 55% of comparable companies, indicating a low value concerning DaVita's profit levels. The same is valid for Price-to-Book Capital (also referred to as market-to-book ratio) with a Price-to-Book Rank of 3 and for dividend yield, which is lower than for 99% of comparable companies, making the stock more expensive as regards to the company's expected dividend payouts. ...read more

RECOMMENDATION: The overall picture with a consolidated Value Rank of 19, is a sell recommendation based on DaVita's stock price compared with the company's operational size and dividend yields. Can we rely on only one good value indicator? Only if we know the company well. In this case, a high Price-to-Profit Rank, while Price-to-Sales and Price-to-Book are both below the market typical levels, means that the company can charge higher prices for its products and needs less capital to produce them. If this is sustainable, then DaVita is a good investment because profits count most in enterprise valuations. The low dividend yield indicates that the company is confident it can do something with the generated cash that is more valuable than paying the profits out to the shareholders in the form of dividends. ...read more

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Growth Strategy: DaVita Growth Momentum good

GROWTH METRICS	November 14, 2024
REVENUE GROWTH
REVENUE GROWTH	28
PROFIT GROWTH
PROFIT GROWTH	70
CAPITAL GROWTH
CAPITAL GROWTH	39
STOCK RETURNS
STOCK RETURNS	87
CONSOLIDATED RANK: GROWTH
CONSOLIDATED RANK: GROWTH	65

ANALYSIS: With an Obermatt Growth Rank of 65 (better than 65% compared with alternatives), DaVita shows an above-average growth dynamic in its industry. Investors also speak of positive momentum. The Growth Rank is based on consolidating four value indicators, with half of the indicators below and half above average for DaVita. Profit Growth has a rank of 70, which means that currently professionals expect the company to grow its profits more than 70% of its competitors. This is a good sign for shareholders, which is confirmed by an above-average Stock Returns rank of 87 (above 87% of alternative investments). But Sales Growth has a below the median rank of 28, which means that, currently, professionals expect the company to grow less than 72% of its competitors, and Capital Growth also has a lower rank of 39. ...read more

RECOMMENDATION: The overall picture with a consolidated Growth Rank of 65, is a buy recommendation for growth and momentum investors. Because revenues and invested capital are the more solid growth indicators, the positive development on the profit side is less relevant. It may have been caused by cost-cutting, which may be a negative growth indicator. Finally, the above-average stock returns recently are a thing of the past and not a good indicator of future returns. Investors should be confident that the cost-cutting initiative leading to higher profits is to benefit the company's future. If not, there is little growth momentum, and investment is only advisable if the Value Ranks suggest a good investment timing for DaVita. ...read more

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Safety Strategy: DaVita Debt Financing Safety below-average

SAFETY METRICS	November 14, 2024
LEVERAGE
LEVERAGE	12
REFINANCING
REFINANCING	55
LIQUIDITY
LIQUIDITY	44
CONSOLIDATED RANK: SAFETY
CONSOLIDATED RANK: SAFETY	26

ANALYSIS: With an Obermatt Safety Rank of 26 (better than 26% compared with alternatives), the company DaVita has financing practices on the riskier side, which means that their overall debt burden is above the industry average. This doesn't mean that the business of DaVita is also risky, it only means that the company is on the riskier side in respect to bankruptcy in case things turn sour, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with just one indicator above average for DaVita and the other two below average. Refinancing is at 55, meaning the portion of the debt about to be refinanced is below average. It has less debt in the refinancing stage than 55% of its competitors. But Leverage is high with a rank of 12, meaning the company has an above-average debt-to-equity ratio. It has more debt than 88% of its competitors. Liquidity is also on the riskier side with a rank of 44, meaning the company generates less profit to service its debt than 56% of its competitors. ...read more

RECOMMENDATION: With a consolidated Safety Rank of 26 (worse than 74% compared with alternatives), DaVita has a financing structure that is riskier than that of its competitors. A good Refinancing Rank means that the problems of the company may not be around the corner. But high Leverage is only good if things go well, and low Liquidity is a signal for caution. The financing signals for DaVita are on the riskier side, requiring the company's future to be on the safer side. Investors may want to look at Growth and Sentiment ranks before making an investment decision. ...read more

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Combined financial peformance: DaVita Lowest Financial Performance

COMBINED PERFORMANCE	November 14, 2024
VALUE
VALUE	19
GROWTH
GROWTH	65
SAFETY
SAFETY	44
COMBINED
COMBINED	10

ANALYSIS: With an Obermatt Combined Rank of 10 (worse than 90% compared with investment alternatives), DaVita (Health Care Services, USA) shares have lower financial characteristics compared with similar stocks. Shares of DaVita are low in value (priced high) with a consolidated Value Rank of 19 (worse than 81% of alternatives), and are riskily financed (Safety Rank of 26, which means above-average debt burdens) but show above-average growth (Growth Rank of 65). ...read more

RECOMMENDATION: A Combined Rank of 10, is a sell recommendation based on DaVita's financial characteristics. As the company DaVita shows low value with an Obermatt Value Rank of 19 (81% of comparable investments are less expensive), investors should look at the other ranks. In this case, growth is expected to be above-average, better than 65% of comparable companies (Obermatt Growth Rank is 65). This is a typical case. Companies with above average growth tend to cost more than stocks with slower growth expectations. If this is a high-growth company, the low Obermatt Safety Rank of 26 is a good sign. The more debt a well-performing company has, the higher the returns to shareholders. However, if growth turns negative or interest rates increase, high debt may become a burden. If you believe the future is bright for DaVita, even a low-value company (in terms of its key financial indicators) can be a good investment. ...read more

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