DVA Should I Buy
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DaVita Inc (DVA) is not a strong buy at the moment for a beginner investor with a long-term strategy. While the company has shown strong earnings growth and positive guidance for 2026, there are significant negative catalysts, such as insider and hedge fund selling, as well as Berkshire Hathaway's recent divestment. Additionally, the technical indicators suggest the stock is nearing resistance levels, and the options data reflects a bearish sentiment. Given the user's impatience and unwillingness to wait for optimal entry points, holding off on buying at this time is the most prudent decision.
The MACD is positive and expanding, indicating bullish momentum. However, the RSI is at 78.815, which is close to being overbought. The stock is trading near its resistance level (R1: 149.429), suggesting limited immediate upside potential. Moving averages are converging, indicating no clear trend.
Strong Q4 earnings performance with a 10% revenue increase and 52% surge in adjusted EPS.
Management's optimistic 2026 guidance, projecting 45% EPS growth.
Analysts have raised price targets, with UBS setting a high target of $190.
Significant selling activity by insiders and hedge funds.
Berkshire Hathaway's sale of 1.7 million shares, raising concerns about institutional confidence.
Net income dropped by 9.68% YoY in Q4 2025, despite revenue growth.
Elevated implied volatility and bearish options sentiment.
In Q4 2025, revenue increased by 9.87% YoY to $3.62 billion, and EPS rose by 6.47% YoY to $3.29. However, net income declined by 9.68% YoY, indicating some underlying challenges. Gross margin improved to 28.28%, up 4.09% YoY.
Analysts have raised price targets, with UBS being the most bullish at $190, citing strong EPS growth and accretive acquisitions. However, most analysts maintain a Hold rating, reflecting cautious optimism due to mixed volume trends and external factors.
