Is DaVita Inc. (DVA) A Good Stock To Buy?

We came across a bullish thesis on DaVita Inc. on Roche Capital’s Substack by Pedro Ortiz. In this article, we will summarize the bulls’ thesis on DVA. DaVita Inc.'s share was trading at $154.79 as of March 4th. DVA’s trailing and forward P/E were 16.01 and 11.36 respectively according to Yahoo Finance.

DaVita Inc. provides kidney dialysis services for patients suffering from chronic kidney failure in the United States. DVA ended 2025 as a highly profitable but structurally challenged healthcare company, generating $12.9 billion in revenue with modest 0.6% organic growth and adjusted operating profit of $2.094 billion.

Despite maintaining strong financial quality and an adjusted operating margin of roughly 16.2%, the core challenge for DaVita is the lack of patient volume growth, as dialysis treatments declined by 1.1% during the year. Because the dialysis model is fundamentally based on treatments performed, this decline directly pressures revenue and profitability.

The company’s U.S. dialysis division remains its backbone, with revenue growth in 2025 driven primarily by a 4.7% increase in revenue per treatment rather than higher patient volumes. Management believes that clinical initiatives targeting patient mortality—such as increased vaccination rates, the adoption of GLP-1 drugs like semaglutide, advanced dialysis technologies, and improved care coordination—could eventually restore approximately 2% annual volume growth, but the benefits may not fully materialize until around 2029.

While the Integrated Kidney Care (IKC) segment turned profitable in 2025 with $22 million in operating profit, its progress largely reflects improved performance in value-based contracts rather than meaningful volume expansion, suggesting limited growth potential. DaVita is also pursuing strategic initiatives such as a $200 million minority investment in Elara Caring, a major U.S. home healthcare provider, aimed at improving patient outcomes, reducing hospitalizations, and strengthening integrated care capabilities.

However, the investment thesis remains uncertain because success depends heavily on clinical outcomes rather than traditional operational improvements. Although DaVita continues to generate strong free cash flow of about $1 billion annually and aggressively repurchases shares, much of its projected EPS growth stems from buybacks rather than underlying business expansion. As a result, DaVita represents a financially strong but fundamentally defensive investment where long-term performance depends on whether clinical initiatives can reverse declining patient volumes.