What Happened?
Shares of dialysis provider DaVita Inc. (NYSE: DVA) fell 3.1% in the afternoon session after markets pulled back, reversing early gains, as investor sentiment remained cautious despite a softer-than-expected inflation reading.
Stocks rose in the morning session after an unexpected drop in the Producer Price Index (PPI) for August signaled easing inflation and raised expectations for a potential Federal Reserve interest rate cut. The U.S. Bureau of Labor Statistics reported that the PPI, which measures wholesale prices, edged down 0.1% the previous month, contrary to analyst expectations for a 0.3% rise. This data gives the Federal Reserve more flexibility to consider lowering interest rates to stimulate the economy.
The shares closed the day at $132.26, down 3.2% from previous close.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy DaVita? Access our full analysis report here, it’s free.
What Is The Market Telling Us
DaVita’s shares are not very volatile and have only had 5 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was 7 months ago when the stock dropped 14% on the news that the company reported weak fourth-quarter results: DaVita narrowly exceeded analysts' revenue expectations but fell short on full-year EPS guidance. A key challenge remains patient volume, as center closures and declining patient count could continue to pressure growth. Overall, this quarter could have been better.
DaVita is down 11.7% since the beginning of the year, and at $132.22 per share, it is trading 25.4% below its 52-week high of $177.35 from February 2025. Investors who bought $1,000 worth of DaVita’s shares 5 years ago would now be looking at an investment worth $1,510.
Today’s young investors won’t have read the timeless lessons in Gorilla Game: Picking Winners In High Technology because it was written more than 20 years ago when Microsoft and Apple were first establishing their supremacy. But if we apply the same principles, then enterprise software stocks leveraging their own generative AI capabilities may well be the Gorillas of the future. So, in that spirit, we are excited to present our Special Free Report on a profitable, fast-growing enterprise software stock that is already riding the automation wave and looking to catch the generative AI next.
