DaVita Stock Down in Pre-Market Despite Q2 Earnings Beat, Margins Down

DaVita’s Revenues in Detail

Revenues of $3.55 billion in the second quarter increased 5.2% year over year. The figure topped the Zacks Consensus Estimate by 0.6%.

Revenue per treatment (RPT) in the second quarter of 2026 was $415.9 million, up 2.8% year over year, but down 0.4% sequentially. Per management, the sequential decline reflected a lower commercial mix from declining Affordable Care Act enrollment and lower sequential revenue contribution from phosphate binders.

Shares of this company lost nearly 7.1% in today’s pre-market trading.

DVA’s Segment Details

DaVita generates revenues via two sources — Dialysis patient service revenues and Other revenues.

The dialysis patient service revenues were $3.37 billion, up 4.9% year over year.

Other revenues were $187.7 million, up 8.7% from the year-ago quarter’s figure.

Per management, the total U.S. dialysis treatments for the second quarter were 7,226,600 or 92,649 per day, on average. This represents a per-day increase of 1.09% on a sequential basis. Normalized non-acquired treatment increased 0.3% year over year in the second quarter of 2026.

As of June 30, 2026, DaVita provided dialysis services to around 298,500 patients at 3,266 outpatient dialysis centers, of which 2,671 were U.S. centers while 595 were located across 14 other countries.

As of June 30, 2026, DVA had approximately 64,900 patients in risk-based integrated care arrangements in its Integrated Kidney Care business, representing $5.8 billion in annualized medical spend. The company also had an additional 5,700 patients in other integrated care arrangements.

DaVita’s Margin Details

In the quarter under review, DaVita’s gross profit increased 3.9% year over year to $1.16 billion. However, the gross margin contracted 38 basis points (bps) to 32.7%.

General & administrative expenses climbed 2.6% year over year to $423.5 million.

Adjusted operating profit totaled $738.6 million, reflecting a 4.7% increase from the prior-year quarter’s level. Adjusted operating margin in the second quarter contracted 8 bps to 20.8%.

DVA’s Financial Position

DaVita exited second-quarter 2026 with cash and cash equivalents and short-term investments of $688.9 million compared with $666.5 million at the first quarter of 2026-end. Total debt (including the current portion) at the end of second-quarter 2026 was $10.78 billion compared with $10.63 billion at the end of the first quarter of 2026.

Cumulative net cash provided by operating activities at the end of second-quarter 2026 was $810.9 million compared with $504.2 million a year ago.

During the three months ended June 30, 2026, DVA repurchased 2.2 million shares for $348 million. Subsequent to June 30, through Aug. 4, 2026, the company has repurchased 0.2 million shares of its common stock for $37 million.

DaVita’s Guidance

DaVita has revised its outlook for 2026.

For 2026, DVA continues to expect RPT to reflect growth of 1%-2%, while treatment volume is expected to be near the top end of the company’s previous guidance range of 25 to 50 bps.

Adjusted EPS from continuing operations for the full year is continued to be expected in the range of $14.10-$15.20. The Zacks Consensus Estimate is currently pegged at $15.07.

Our Take on DVA

DaVita ended the second quarter of 2026 with better-than-expected results. The uptick in the company’s top and bottom lines and RPT was encouraging. Solid revenues from both sources and a per-day increase in total U.S. dialysis treatments on a sequential basis were promising. An uptick in normalized non-acquired treatment was also recorded.

On the earnings call, management highlighted plans to deploy expanded hemodialysis across its network after securing an adequate supply of newly approved dialyzers. The technology is compatible with DaVita’s existing machines, enabling broader patient access without significant capital investment. Management expects it to support improved clinical outcomes over time, with mortality-related economic benefits likely beginning in 2028. This initiative aligns with DVA’s broader focus on innovative dialysis technologies and raises our optimism about the stock.

However, the sequential decline in RPT for the second quarter was disappointing. The contraction of both margins does not bode well for the stock.

DaVita’s Zacks Rank and Key Picks

DVA currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the broader medical space that have announced quarterly results are BrightSpring Health Services, Inc. BTSG, Quest Diagnostics Incorporated DGX and Avantor, Inc. AVTR.

BrightSpring, sporting a Zacks Rank of 1 (Strong Buy), reported second-quarter 2026 adjusted EPS of 45 cents, beating the Zacks Consensus Estimate by 21.6%. Revenues of $3.87 billion outpaced the consensus mark by 6.1%. You can see the complete list of today’s Zacks #1 Rank stocks here.

BrightSpring has a long-term estimated growth rate of 46%. BTSG’s earnings surpassed estimates in three of the trailing four quarters and missed once, the average surprise being 16.1%.

Quest Diagnostics reported second-quarter 2026 adjusted EPS of $3.12, beating the Zacks Consensus Estimate by 11%. Revenues of $3.04 billion surpassed the Zacks Consensus Estimate by 2.2%. It currently carries a Zacks Rank #2 (Buy).

Quest Diagnostics has a long-term estimated growth rate of 9.7%. DGX’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 5.8%.

Avantor reported second-quarter 2026 adjusted EPS of 21 cents, beating the Zacks Consensus Estimate by 10.5%. Revenues of $1.69 billion surpassed the Zacks Consensus Estimate by 4.2%. It currently carries a Zacks Rank #2.

Avantor has a long-term estimated growth rate of 1.6%. AVTR’s earnings surpassed estimates in three of the trailing four quarters and missed once, the average surprise being 4.3%.

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