Shares of Davita Inc. (NYSE: DVA) plunged 11% on February 14, as the dialysis provider issued a weaker-than-expected 2025 earnings outlook, citing rising patient care costs, supply constraints, and ongoing dialysis center closures.
The decline was compounded by Berkshire Hathaway (NYSE: BRK.A, BRK.B) reducing its stake in the company as part of a preplanned share repurchase agreement.
By the close of trading on February 14, DaVita stock settled at $157.42, adjusting its year-to-date gain to 27%.
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Earnings beat overshadowed by weak guidance
Despite delivering better-than-expected fourth-quarter results, DaVita’s cautious guidance for 2025 rattled investors. The company posted adjusted earnings per share (EPS) of $2.24, exceeding Wall Street’s forecast of $2.13, while revenue reached $3.3 billion, also topping estimates.
However, DaVita’s 2025 EPS forecast of $10.20 to $11.30 came in below analyst expectations, with the midpoint falling short of the $11.24 consensus estimate.
The weaker outlook came amid rising patient care costs, supply constraints, and dialysis center closures, which cost the company $24.2 million in Q4 alone.
Further weighing on its outlook, new patient growth was impacted by supply constraints in peritoneal dialysis (PD) solutions following the temporary closure of Baxter’s North Cove facility due to Hurricane Helene. This resulted in the loss of approximately 350 new patient admissions, which the company acknowledged will negatively impact 2025 volume growth.
“However, our inability to start new patients on PD contributed to lower new admits in the fourth quarter which will negatively impact volume growth in 2025.”- Javier J. Rodriguez, Chief Executive Officer and Director
Berkshire Hathaway trims Davita stake
Adding to the pressure, Warren Buffett’s Berkshire Hathaway, DaVita’s largest institutional investor, sold 203,091 shares for $31.7 million. The sale, disclosed in a regulatory filing on February 11, brought Berkshire’s stake down to 45%, in line with a previously agreed repurchase plan.
While the move by itself is not a bearish indicator, its timing—coinciding with DaVita’s weak 2025 guidance, amplified market jitters.
Despite the reduction, Berkshire remains the company’s largest shareholder, holding 35.9 million shares worth approximately $6.4 billion. Buffett’s conglomerate first invested in DaVita in 2011, and the stock remains one of its top 10 equity holdings.
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