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Here's why this Warren Buffett stock plunged 11% in a day
DVADaVita(DVA) Finbold·2025-02-17 13:13

Core Viewpoint - DaVita Inc. experienced an 11% decline in stock price due to a weaker-than-expected earnings outlook for 2025, attributed to rising patient care costs, supply constraints, and ongoing dialysis center closures [1][3][4] Financial Performance - DaVita reported adjusted earnings per share (EPS) of 2.24forthefourthquarter,surpassingWallStreet′sforecastof2.24 for the fourth quarter, surpassing Wall Street's forecast of 2.13, with revenue reaching 3.3billion,alsoexceedingestimates[3]−Thecompany′s2025EPSforecastrangesfrom3.3 billion, also exceeding estimates [3] - The company's 2025 EPS forecast ranges from 10.20 to 11.30,whichisbelowanalystexpectations,withthemidpointfallingshortofthe11.30, which is below analyst expectations, with the midpoint falling short of the 11.24 consensus estimate [3] Operational Challenges - Rising patient care costs, supply constraints, and dialysis center closures resulted in a loss of 24.2millioninQ4[4]−Newpatientgrowthwashinderedbysupplyconstraintsinperitonealdialysissolutions,particularlyduetothetemporaryclosureofBaxter′sNorthCovefacility,leadingtoalossofapproximately350newpatientadmissions[5][6]ShareholderActivity−BerkshireHathawaysold203,091sharesofDaVitafor24.2 million in Q4 [4] - New patient growth was hindered by supply constraints in peritoneal dialysis solutions, particularly due to the temporary closure of Baxter's North Cove facility, leading to a loss of approximately 350 new patient admissions [5][6] Shareholder Activity - Berkshire Hathaway sold 203,091 shares of DaVita for 31.7 million, reducing its stake to 45% as part of a preplanned share repurchase agreement [6][7] - Despite the sale, Berkshire remains DaVita's largest shareholder, holding approximately 35.9 million shares valued at around $6.4 billion [7]