DaVita scores 43 for management and 47 for moat. The management score rests on a return on invested capital of 10.6% and a gross margin of 27.0% — figures that describe returns closer to the cost of the capital behind them. Shareholder equity is negative, so the debt-to-equity figure is not meaningful here — usually the mark of heavy buybacks rather than distress, but worth checking.
The price anchors are built on deliberately conservative assumptions. Growth is modelled at 3.4% a year, the rate measured from the filings. The exit multiple assumed is 8.0x. That produces an intrinsic value of $31.40, a 10-CAP price of $270.03 and a payback time price of $251.67, with the value zone set at the highest of the three, $270.03. Today's price of $176.35 sits inside that zone.
The price sits inside the value zone, but the business scores 47 for moat and 43 for management. Cheap and good are different tests, and only one of them is passed here.
| Price | $176.35 |
| Market cap | $11.3B |
| P/E ratio | 15.5x |
| Return on invested capital | 10.6% |
| Gross margin | 27.0% |
| Debt to equity | -23.12x |
| Free cash flow yield | 13.4% |
| Growth rate used | 3.4% |
| Growth rate measured | 3.0% |
| Exit multiple assumed | 8.0x |
| Company | Moat | Buy price |
| Bio-Techne (TECH) | 50 | $17.73 |
| Biomarin Pharmaceutical Inc (BMRN) | 84 | $53.67 |
| Brightspring Health Services (BTSG) | 75 | $31.07 |
| Cooper Companies (The) (COO) | 59 | $53.35 |
Every number above is built on assumptions that can be changed. In Moatly you can move the growth rate, the exit multiple and the margin of safety and watch every figure recalculate, so you are testing your own view of DaVita rather than accepting ours.