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DaVita Inc. (DVA) Intrinsic Value

DCF-based fair value calculation with Bear, Base, and Bull scenarios

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DaVita Inc. (DVA)

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Intrinsic Value (DCF)

Current$105.84
→
Intrinsic$280.37
+165%
$150.24$280.37$527.58
Market implies 2% growth for 5 years
DCF analysis suggests DVA could have 165% upside at 15% growth — verify assumptions match your view.
At $106, the market prices in only 2% growth — below historical 15%, suggesting low expectations.
Range: Bear $150 → Bull $528. Current price implies expectations below the bear case — very conservative expectations.
Discount ↓Growth →11%13%15%17%
8%$365$408$453$502
10%$220$249$280$314
12%$139$161$185$210
14%$89$106$124$144

Bull Case

  • Bull case ($528) offers 398% upside at 18% growth, 9% discount
  • Price below even worst-case scenario — strong margin of safety
  • Market-implied growth (2%) ≤ historical CAGR (15%)

Bear Case

  • Bear case ($150) with 12% growth, 12% discount rate
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5-Year Free Cash Flow Projection

Year 1$1.69B
Year 2$1.95B
Year 3$2.25B
Year 4$2.59B
Year 5$2.99B
Terminal$43.94B

📐 Model Inputs

Growth Rate15.3%5Y CAGR (cascade: 5Y→3Y→TTM)
Discount Rate10.0%WACC estimate
Terminal Growth3.0%Perpetuity rate
Base Free Cash Flow$1.47BTTM actual
Bear g×0.8, r+2%
Base Historical CAGR
Bull g×1.2, r−1.5%
ℹ️

DCF estimates based on historical growth rates extrapolated forward. See FAQ below for full methodology.

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Frequently Asked Questions

Is DVA stock undervalued or overvalued?
🟢 UNDERVALUED

DVA trades at $105.84 vs. our DCF-derived intrinsic value of $280.37, implying +144% upside. At a 10.0% WACC and 15.3% projected FCF growth, the market appears to be underpricing the present value of DVA's future cash flows. The bear case ($149.63) still suggests upside, providing margin of safety.

What is DVA's intrinsic value?

Using a 5-year DCF model: Base FCF of $1.47B, projected at 15.3% 5Y CAGR (best of revenue, EPS, or FCF growth), discounted at 10.0% WACC, with 3.0% terminal growth. Terminal value calculated via Gordon Growth Model: TV = FCF₅ × (1+g) / (WACC−g). After deducting $11.27B net debt and dividing by 0.09B shares: Bear $149.63 | Base $280.37 | Bull $466.37. Current price $105.84 implies +144% to base case.

How is DVA's fair value calculated?

DCF Methodology:

① Project FCF years 1-5 using 15.3% growth derived from 5-year historical CAGR (best of revenue, EPS, or FCF growth, with 8% floor and 25% cap).

② Calculate terminal value at year 5 using perpetuity growth model with g=3.0%.

③ Discount all cash flows to PV using WACC=10.0%.

④ Sum PV of explicit period + PV of terminal value = Enterprise Value ($35.74B).

⑤ Subtract net debt, divide by shares outstanding.

Sensitivity analysis available above—adjust WACC ±2% or growth ±3% to stress-test the valuation. Implied EV/FCF multiple: 24.4x.