DaVita Healthcare Partners Inc. (DVA) is set to report fourth-quarter and full-year 2014 earnings results on Feb 12, 2015. Last quarter, it posted a 1.10% negative earnings surprise. Let us see how things are shaping up for this announcement.
Factors Affecting the Past Quarter
In the quarter under review, this leading kidney care and health care services provider has enhanced its operational strength, which should boost its results. The company merged two of its business units, DaVita Clinical Research (DCR) and HealthCare Partners Clinical Research to expand its clinical research and data analytics services. . This is supported by its strong financial position. Additionally, acquisition of dialysis centers and businesses that own and operate dialysis centers as well as other ancillary services are expected to boost earnings per share.
However, high financial leverage, increased expenses and the adverse effect of health care reform raise caution.
Earnings Whispers
Our proven model does not conclusively show that DaVita is likely to beat estimates this quarter. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank of #1, 2 or 3 for this to happen. That is not the case here as you will see below.
Zacks ESP: DaVita has an ESP of 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate stand at 88 cents per share.
Zacks Rank: DaVita has a Zacks Rank #3 (Hold) which increases the predictive power of ESP; but when combined with a 0.00% ESP, the surprise prediction becomes difficult.
We caution against Sell-rated stocks (Zacks Rank #4 and 5) going into the earnings announcement, especially when the company is seeing negative estimate revisions momentum.
Stocks to Consider
Here are some stocks in the medical sector you may want to consider, as our model shows that they have the right combination of elements to post an earnings beat this quarter:
Actavis plc (ACT) has an Earnings ESP of +4.38% and a Zacks Rank #2 (Buy).
Lifepoint Hospitals Inc. (LPNT) has an Earnings ESP of +3.96% and a Zacks Rank #2.
Acorda Therapeutics, Inc. (ACOR) has an Earnings ESP of +40.00% and a Zacks Rank #3.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Be the first to comment