DaVita heads into its October 30 earnings print with a striking split personality: short sellers have been quietly adding exposure all month, while options traders have just swung to their most bullish stance of the past year.
The options signal is the sharpest divergence. The put/call ratio has dropped to 0.52 — more than 2.5 standard deviations below its 20-day average of 0.57 — and that reading is the lowest level DVA has seen across the full past year. That kind of call-heavy skew reflects options traders positioning for upside into the October print, not hedging against a repeat of the August selldown.
Short interest tells a very different story. Bears have been steadily rebuilding since early September, when shares short jumped roughly 18% in a single week — from around 3.97 million to 4.73 million — and haven't retreated since. DVA now has 6.8% of its free float sold short, up 13% over the past month. The borrow market remains relaxed, with availability at 341% — plenty of headroom for new shorts to enter — and cost to borrow at just 0.49%, even after rising 8% on the week. The ORTEX short score has crept higher too, reaching 63.4 on September 22, up from 56.9 two weeks earlier. The setup is one of genuine divergence: call buyers and short sellers are simultaneously increasing conviction in opposite directions ahead of results.
That divergence makes more sense when you look at what the Street is debating. The consensus sits at hold, and the post-August analyst moves reflect a cautious reset after the stock fell 19% the day of Q2 results and extended that drop to nearly 24% over five days. TD Cowen upgraded DVA to Buy in early August — lifting its target to $220 after cutting it from $201 — while Truist simultaneously cut its target to $215 from $250, keeping a hold. Barclays, also on August 5, nudged its Equal-Weight target slightly higher to $224. The bull case centres on DaVita's structural moat: 35% of US dialysis clinics, 280,000 patients annually, and Berkshire Hathaway's 45% anchor stake — a vote of confidence that has held even as Berkshire trimmed 183,000 shares in late July for roughly $36.5 million. The bear case is simpler: Medicare accounts for two-thirds of US revenues, the payer mix is deteriorating, and the Q2 print proved that misses carry serious downside. At 11x trailing earnings and 8.6x EV/EBITDA, valuation is not stretched, but it doesn't price in another earnings shock either.
Berkshire's July trim is worth noting in the ownership context. The sale was not under a 10b5-1 plan, but at $36 million it barely dents a stake worth well over $5 billion at current prices. Berkshire remains the dominant holder at roughly 45% of shares. CEO Javier Rodriguez sold $8.2 million of stock in mid-June, also outside a pre-arranged plan. The net insider position over 90 days runs to a $54 million net sale — almost entirely Berkshire and the CEO — which adds a faint overlay of caution even if the Berkshire position remains effectively permanent. The 13D on file from Warren Buffett is the most newsworthy structural fact about this name; that activist-style stake constrains what management can do and also limits the float meaningfully. Note that 13D/G positions are as-last-disclosed and can change without a further filing once a holder moves below the 5% threshold.
The last two earnings reactions are the final piece of context: DVA fell 19% the day after Q2 results in August, and the five-day move reached nearly -24%. That is a violent reaction for a defensive healthcare operator. The October 30 print therefore becomes less about whether dialysis volumes are growing and more about whether management can credibly reset the reimbursement narrative — and whether the call buyers crowding the options market have read the setup right.
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