Here’s a wild stat: DaVita stock has returned 3,000% over the past 25 years. That’s not a typo. Yet somehow, this dialysis giant is trading at a discount to its own industry peers. If that doesn’t scream “undervalued,” I don’t know what does.
The company just crushed Q1 earnings on May 5, beating estimates by 19% and sending shares up 70% year-to-date. But here’s the thing—this isn’t some flash-in-the-pan rally. DaVita’s fundamentals are genuinely solid, and the tailwinds are just getting started.
Why Dialysis? Because America’s Getting Sicker (Sorry)
Let’s be real: chronic kidney disease is becoming an epidemic. The CDC estimates that 37 million Americans have CKD, and the numbers keep climbing. Diabetes and high blood pressure are the culprits, and both are getting worse. About 4 in 10 diabetics have kidney disease, and 1 in 5 people with hypertension do too. It’s grim, but it’s also DaVita’s entire business model.
The company operates over 3,200 dialysis centers globally, serving roughly 300,000 patients. About 82% of those centers are in the U.S., where DaVita controls roughly 38% of the market. That’s serious market dominance in a business that’s literally recession-proof—people need dialysis or they die. No amount of economic downturn changes that calculus.
The Numbers Are Ridiculous
DaVita is projected to double its earnings per share from $8.38 in 2023 to $18.37 by 2027. That’s not gradual growth—that’s explosive. The company is expected to grow EPS by 40% in 2026 alone, then another 22% in 2027. Revenue is growing too, just more modestly at 5% and 4% respectively.
Analysts have been revising estimates upward consistently, which earned DaVita a Zacks Rank #1 (Strong Buy). That’s analyst-speak for “this thing is going higher.” The company’s forward earnings guidance has climbed 9% since Q1, and the upward revision trend started way back in early 2026.
The Valuation Trap
Here’s where it gets interesting. Despite being up 70% this year and hitting all-time highs, DaVita is trading at just 11.9X forward earnings—a 15% discount to its own historical median and a 30% discount to its industry peers. It’s also trading 45% below its previous highs in terms of valuation multiples.
Translation: the stock is expensive in absolute terms but cheap relative to what it should be worth given its growth trajectory. That’s the kind of setup that makes long-term investors salivate.
The Catch
Sure, the stock might be a bit overheated technically right now. The broader market looks bloated, and a pullback wouldn’t be shocking. But here’s the thing—any near-term weakness would just be a better entry point for a company with this much structural tailwind.
DaVita isn’t sexy. It’s not AI, it’s not quantum computing, it’s not even particularly exciting. But it’s a business that’s growing earnings at 40% annually, operates in a market with zero competition from disruption, and is still trading at a reasonable valuation. In a market that’s increasingly expensive, that’s actually pretty rare.
If you’re looking for a stock that combines growth, value, and demographic inevitability, DaVita deserves a serious look.
