DaVita enters the week after one of its best earnings prints in years — and the market's reaction has split the tape between a jubilant price move and a cluster of insider exits at the new highs.
The catalyst was unmistakable. Q1 results released May 5 sent the stock up nearly 26% in a single session. Five-day follow-through added another 4 points on top of that, leaving DVA up 34% over the past month and closing Friday at $199.74. That kind of move compresses the short story fast: at 18% of free float, short interest is genuinely elevated — but the direction of travel has shifted. SI dipped slightly this week to roughly 17.95% of free float after briefly spiking above 18.35% in late April. The sharp post-earnings short covering that began May 5 remains only partially complete; the base stays large.
The lending market tells a looser story. Availability has climbed to around 381% of short interest — meaning the pool of shares available to borrow is nearly four times the existing short position. That figure has expanded materially since early May, when availability was closer to 240%. Cost to borrow has also eased, running near 0.40% this week after touching 0.56% at the end of April. Taken together, the borrow market is actively loosening as the stock re-rates: new shorts face no structural friction at these levels. Options confirm the shift in tone. The put/call ratio has dropped to 0.62, almost 1.5 standard deviations below its 20-day average of 0.79, and near the 52-week low of 0.61. Traders are buying calls, not hedging.
The Street moved quickly after earnings. Deutsche Bank's upgrade from Hold to Buy — with a target jump from $126 to $220 — was the most dramatic re-rating, representing a near-doubling of the implied upside in one move. UBS raised its Buy target to $235 from $190. Barclays, Truist, and TD Cowen all lifted targets while holding neutral-leaning ratings: Barclays moved to $194, Truist to $205, and TD Cowen to $201 — all still below current price of $199.74, which puts the consensus mean target of $193.71 technically below the market. That creates an unusual setup: the bulls have re-rated but the target math hasn't fully caught up with the tape. Factor scores back the fundamental quality narrative — EPS momentum ranks in the 83rd percentile on a 30-day basis, EPS surprise in the 79th, and forward EPS growth year-on-year in the 80th. The EV/EBITDA has compressed to roughly 9x and has been drifting lower over the past 30 days, suggesting the market is not yet pricing in a full re-rating of the business despite the price move.
The insider picture is the story the rally watchers should not miss. Berkshire Hathaway — which owns approximately 45% of DaVita — sold roughly 1.22 million shares on May 1 for around $183 million. That transaction happened before the earnings pop, when the stock was still in the $149 range. CFO Joel Ackerman then sold 51,471 shares on May 7 at $192, netting nearly $9.9 million. Division COO David Maughan sold across two days — May 11 and May 12 — collecting just over $4 million combined. The pattern is consistent: every disclosed insider trade in the past 90 days has been a sale, with a net 90-day value across all insiders of over $212 million in exits. Berkshire's trim, taken before the print, is the structural story — the controlling shareholder used the pre-earnings period to reduce exposure, and management followed into the rally.
The next catalyst is already dated: DaVita reports again on June 4. The prior print delivered a 26% single-day move — by some margin the most violent quarterly reaction in the recent record. The June 4 setup will therefore be assessed against an unusually high bar of expectation, with a stock that has re-rated 34% in a month, insiders selling into the strength, and the consensus target sitting below the current price. How management frames guidance on reimbursement trends and commercial payer mix — the core of both the bull and bear case — will determine whether the rally extends or consolidates.
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