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DaVita's (DVA) New Buyout to Enhance Transplant Experience

Zacks Equity Research
·3 min read

DaVita Inc. DVA recently acquired a transplant software company — MedSleuth — that will help the former to boost its efforts to drive transplant innovation and strengthen its presence along a patient’s kidney care journey. This move reinforces DaVita’s commitment to health equity by improving access to transplantation.

It is worth mentioning that MedSleuth, which works with transplant centers throughout the United States, aims to improve connectivity among transplant candidates and centers, physicians and care teams to enhance the patient experience and outcomes.

MedSleuth’s innovative software helps in simplifying the evaluation process of candidates and keeps them active on the waitlist. It also aids in improving the rate of transplantation through living donation.

This buyout is likely to boost DaVita Kidney Care — the company’s major revenue-generating business.

Rationale of the Buyout

Per management at DaVita, kidney transplantation is a life-altering option for most people with kidney failure, which is presently limited by supply and complexity. Patients can get greater access to transplantation through MedSleuth’s powerful platform.

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Through this buyout, DaVita will support the team at MedSleuth to advance innovation and simplify the transplant process for transplant candidates as well as centers, physicians and care teams.

Per MedSleuth’s management, the company and DaVita are likely to leverage their common vision to boost access to transplantation.

Market Prospects

Per a report by Grand View Research, the global transplantation market was worth $8.4 billion in 2020 and is projected to witness a CAGR of 11.5% over the forecast period (2021-2028). Rising demand for novel tissue transplantation products and organ transplantation for the treatment of organ failure is the primary factor driving this market’s growth.

Hence, this buyout is a well-timed one for DaVita.

Another Notable Development

In November 2021, the company announced that its DaVita Clinical Research study has found that dialysis patients who received mRNA COVID-19 vaccines were at a lower risk of contracting the COVID-19 infection post-vaccination. The study also found that vaccinated patients were less likely to be hospitalized or die following breakthrough infection, unlike the unvaccinated patients.

Price Performance

Shares of the Zacks Rank #3 (Hold) company have lost 6.9% in the past year compared with the industry’s decline of 47.4%.

Stocks to Consider

Some better-ranked stocks in the broader medical space include AMN Healthcare Services, Inc. AMN, Henry Schein, Inc. HSIC and Laboratory Corporation of America Holdings LH.

AMN Healthcare surpassed earnings estimates in each of the trailing four quarters, the average surprise being 19.5%. The company currently sports a Zacks Rank of 1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

AMN Healthcare’s long-term earnings growth rate is estimated at 16.2%. The company’s earnings yield of 5.5% compares favorably with the industry’s 0.8%.

Henry Schein beat earnings estimates in each of the trailing four quarters, the average surprise being 21.9%. The company currently carries a Zacks Rank #2 (Buy).

Henry Schein’s long-term earnings growth rate is estimated at 11.8%. The company’s earnings yield of 5.9% compares favorably with the industry’s 4.1%.

Laboratory Corporation surpassed earnings estimates in each of the trailing four quarters, the average surprise being 25.7%. The company currently sports a Zacks Rank #1.

Laboratory Corporation’s long-term earnings growth rate is estimated at 10.6%. The company’s earnings yield of 9.4% compares favorably with the industry’s 3.4%.


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

Laboratory Corporation of America Holdings (LH) : Free Stock Analysis Report

DaVita Inc. (DVA) : Free Stock Analysis Report

Henry Schein, Inc. (HSIC) : Free Stock Analysis Report

AMN Healthcare Services Inc (AMN) : Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research