Here's Why You Should Add DaVita Stock to Your Portfolio for Now

DaVita Inc. DVA has been gaining from its business model. The optimism, led by a solid fourth-quarter 2025 performance and the overseas growth, is expected to contribute further. However, concerns regarding its dependence on commercial payers persist.

In the last six months, this Zacks Rank #2 (Buy) stock has gained 11.5% compared with the industry's 2.6% growth and the S&P 500's 6.3% increase.

The renowned global comprehensive kidney care provider has a market capitalization of $10.34 billion. The company projects 20.2% growth for the next five years and expects to maintain its strong performance going forward. DaVita’s earnings surpassed the Zacks Consensus Estimate in three of the trailing four quarters and missed once, the average surprise being 1.2%.

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Upsides

Business Model: DaVita’s patient-centric model integrates a broad kidney care platform to expand patient choice across care settings and treatment modalities. As value-based arrangements gain traction in kidney care, collaboration among nephrologists, providers and transplant programs is deepening, enabling better care coordination and earlier clinical intervention. DaVita’s Integrated Kidney Care business actively participates in CMMI’s Comprehensive Kidney Care Contracting model, which focuses on managing late-stage CKD and ESKD patients to slow disease progression, increase home dialysis adoption and encourage transplants.

The company also operates dialysis centers through joint ventures in which it typically holds controlling stakes, while partners such as nephrologists, hospitals and other healthcare providers own minority interests. Many of DaVita’s outpatient centers support home hemodialysis and peritoneal dialysis, helping eligible patients receive treatment at home.

Overseas Growth: DaVita is steadily expanding in the international markets. In the past few years, the company has strengthened its position in the emerging and developing markets of Brazil, China, Colombia, Germany, India, Malaysia, the Netherlands, Poland, Portugal and Saudi Arabia through strategic alliances as well as acquisitions of dialysis centers. These are expected to help DaVita deliver more efficient patient care. Currently, DaVita is seeking to expand in major European and Asian countries via acquisitions and partnerships. In 2025, management expects operating growth in the company’s international business as it continues expansion in international markets.

As of Dec. 31, 2025, DaVita provided dialysis services to around 295,000 patients at 3,242 outpatient dialysis centers, of which 2,657 were U.S. centers while 585 were located across 14 other countries. During the fourth quarter of 2025, the company acquired one and closed six dialysis centers in the United States. It also acquired three, opened one and closed five dialysis centers outside the United States in the same period.

Solid Q4 Results: DaVita ended the fourth quarter of 2025 with better-than-expected results. The uptick in the company’s top line and RPT was encouraging. Solid revenues from both sources and the opening and acquisition of dialysis centers within the United States and overseas were promising. The expansion of both margins bodes well for the stock.

On the earnings call, management announced a strategic clinical partnership with home-care provider, Elara Caring, to establish an end-stage kidney disease-focused offering. This model spans Elara's home health, personal care and hospice service lines and is designed to lower hospitalizations and missed treatment rates while improving the overall patient experience.

Downsides

Dependence on Commercial Payers: DaVita generates a disproportionately large share of its U.S. dialysis profits from commercially insured patients, even though they represent a small portion of the patient base. In 2025, about 26% of dialysis patient service revenues came from non-hospital commercial payers, while these patients accounted for only 11% of total U.S. dialysis patients. By contrast, roughly 89% of patients were covered by government programs, including 73% under Medicare and Medicare Advantage.

DaVita’s profitability is highly sensitive to shifts in payer mix because commercial plans reimburse at significantly higher rates than government programs. Economic weakness, rising unemployment, reduced affordability of ACA exchange plans or continued growth in Medicare Advantage enrollment could push patients from higher-paying commercial coverage to lower-paying government programs, potentially pressuring reimbursement rates and weakening center-level economics.

Estimate Trend

DaVita is witnessing a positive estimate revision trend for 2026. In the past 30 days, the Zacks Consensus Estimate for earnings per share has moved north $1.59 at $14.16.

The Zacks Consensus Estimate for the company’s first-quarter 2026 revenues is pegged at $3.3 billion, indicating a 2.4% uptick from the year-ago quarter’s reported number. The consensus mark for earnings is pegged at $2.41 per share, implying a 20.5% year-over-year decline. 

Stocks to Consider

Some top-ranked stocks from the broader medical space are Intuitive Surgical ISRG, Phibro Animal Health PAHC and Cardinal Health CAH.

Intuitive Surgical, sporting a Zacks Rank #1 (Strong Buy) at present, reported fourth-quarter 2025 adjusted earnings per share (EPS) of $2.53, beating the Zacks Consensus Estimate by 12.4%. Revenues of $2.87 billion surpassed the Zacks Consensus Estimate by 4.7%.

ISRG has an estimated long-term earnings growth rate of 15.7% compared with the industry’s 14% rise. The company beat earnings estimates in the trailing four quarters, the average surprise being 13.2%.

Phibro Animal Health, currently sporting a Zacks Rank #1, reported second-quarter 2025 adjusted EPS of 87 cents, which surpassed the Zacks Consensus Estimate by 26.1%. Revenues of $373.9 million beat the Zacks Consensus Estimate by 4.7%.

PAHC has an estimated long-term earnings growth rate of 21.5% compared with the industry’s 12.6% rise. The company beat earnings estimates in the trailing four quarters, the average surprise being 20.1%.

Cardinal Health, currently carrying a Zacks Rank #2, reported second-quarter fiscal 2026 adjusted EPS of $2.63, which surpassed the Zacks Consensus Estimate by 10%. Revenues of $65.6 billion beat the Zacks Consensus Estimate by 0.9%.

CAH has an estimated long-term earnings growth rate of 15% compared with the industry’s 9.1% rise. The company beat earnings estimates in the trailing four quarters, the average surprise being 9.3%.