Why DaVita Inc Stock Is Plummeting Today

Shares of DaVita Inc (NYSE: DVA) are trading lower on Friday. The company's stock lost 11.1% as of market close but lost as much as 15.2% earlier in the day. The drop comes as the S&P 500 lost 0.1%, and the Nasdaq composite was up 0.4%.

DaVita, a large operator of kidney dialysis clinics, reported fourth-quarter and year-end numbers on Thursday that, though mostly positive, fell short of expectations in a key area.

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The numbers

The healthcare company's Q4 2024 earnings report showed mostly positive numbers, delivering earnings per share (EPS) of $2.24, beating analyst estimates of $2.13, on sales of $3.3 billion, again surpassing Wall Street's targets.

The success of the last quarter was overshadowed by relatively weak guidance for 2025. The company expects EPS to fall between $10.20 and $11.30. The consensus estimate on Wall Street was $11.24, near the top end of a fairly wide guidance range that reflects elevated uncertainty in the year ahead. The company faces supply constraints and rising patient care costs.

The company also reported that its mortality and mistreatment rates remained at elevated levels, which would continue to impact new patient growth.

Other news

The slip in share price was also driven by news on Thursday that Berkshire Hathaway had trimmed its stake in DaVita. The legendary company still owns 45% of DaVita but sold more than 200,000 shares. Although this isn't a massive sale, its timing with a somewhat disappointing earnings report didn't instill confidence in investors.

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Johnny Rice has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Berkshire Hathaway. The Motley Fool has a disclosure policy.