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Quest Diagnostics
(NYSE:DGX)
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Rating:73Outperform
Price Target:
$271.00
▲(10.83% Upside)
Action:Reiterated
Date:10/23/26
The score is driven primarily by solid financial performance (steady growth, improving margins vs. recent years, strong free cash flow, and better leverage) and supportive technicals (price above major moving averages with positive momentum). The earnings call reinforces the outlook via raised FY2026 guidance, though reimbursement (PAMA), cost pressures, Project Nova spend, and the cybersecurity investigation temper confidence. Valuation is a headwind given a P/E around 25 and a modest dividend yield.
Positive Factors
Broad revenue and volume growth
Broad volume and revenue growth across diagnostic information services indicates sustained demand rather than reliance on a single customer or test category. Continued physician, hospital, and consumer adoption can support operating leverage and strengthen Quest’s position as healthcare utilization expands.
Negative Factors
Medicare reimbursement pressure
PAMA rate reductions create a structural reimbursement headwind for a meaningful portion of Quest’s testing portfolio. Management expects to offset some of the effect, but the scale and breadth of code cuts could pressure revenue, pricing power, and margins beyond the immediate quarter.
Read all positive and negative factors
Positive Factors
Negative Factors
Broad revenue and volume growth
Broad volume and revenue growth across diagnostic information services indicates sustained demand rather than reliance on a single customer or test category. Continued physician, hospital, and consumer adoption can support operating leverage and strengthen Quest’s position as healthcare utilization expands.
Read all positive factors
Quest Diagnostics Key Performance Indicators (KPIs)
Any
Revenue by Segment
Shows the revenue contribution from each business segment, indicating which areas are the most lucrative and where the company might focus future growth efforts.
Shows the revenue contribution from each business segment, indicating which areas are the most lucrative and where the company might focus future growth efforts.
Data provided by:
The Fly
The FlyQuest Diagnostics (DGX) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$26.70B
Dividend Yield1.4%
Average Volume (3M)1.15M
Price to Earnings (P/E)23.8
Beta (1Y)>-0.01
Revenue Growth9.13%
EPS Growth17.93%
CountryUS
Employees57,000
SectorHealthcare
Sector Strength45
IndustryMedical - Diagnostics & Research
Share Statistics
EPS (TTM)10.18
Shares Outstanding110,373,360
10 Day Avg. Volume1,051,466
30 Day Avg. Volume1,152,538
Financial Highlights & Ratios
PEG Ratio1.43
Price to Book (P/B)2.69
Price to Sales (P/S)1.75
P/FCF Ratio14.17
Enterprise Value/Market Cap1.20
Enterprise Value/Revenue2.70
Enterprise Value/Gross Profit8.15
Enterprise Value/Ebitda13.89
Forecast
1Y Price Target
$258.56Price Target Upside5.74% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering9
EPS Forecast (FY)11.28
Revenue Forecast (FY)$12.07B
Quest Diagnostics Business Overview & Revenue Model
Company Description
Quest Diagnostics Incorporated, founded in 1967 and headquartered in Secaucus, New Jersey, is a premier provider of diagnostic testing, information, and related services, serving clients both domestically and internationally. Its core business inv...
How the Company Makes Money
Quest Diagnostics primarily makes money by performing diagnostic tests and providing related laboratory services, earning revenue largely on a fee-for-service basis. Its core revenue stream comes from clinical laboratory testing volumes processed ...
Quest Diagnostics Earnings Call Summary
Earnings Call Date:Oct 22, 2026
(Q3-2026)
| % Change Since: |
Next Earnings Date:Feb 04, 2027
Earnings Call Sentiment Positive
The call was strongly positive overall, supported by 10% revenue growth, 15.4% adjusted EPS growth, broad organic volume gains, improving margins, strong channel performance, productivity initiatives, and raised full-year guidance. The main negative factors were the expected PAMA revenue headwind, broad anticipated rate cuts, wage and fuel cost pressure, additional Project Nova spending, and an early-stage cybersecurity investigation. Management stated that it intends to offset a portion of the PAMA impact and maintained confidence in utilization and underlying demand.Positive Updates
Strong Third-Quarter Revenue and Earnings Growth
Third-quarter consolidated revenues were $3.1 billion, up 10% versus the prior year. Adjusted EPS was $3.00 versus $2.60 a year ago, an increase of 15.4%, driven largely by strong organic operating performance.
Negative Updates
Expected PAMA Revenue Headwind
Quest estimates that the impact of PAMA on 2027 revenue will be approximately 1% of total company revenues, with a cumulative impact of less than 1.3% of total revenues for 2027 through 2029. The company expects to offset a portion of the impact but has not yet quantified the offset.
Read all updates
Q3-2026 Updates
Positive
Negative
Strong Third-Quarter Revenue and Earnings Growth
Third-quarter consolidated revenues were $3.1 billion, up 10% versus the prior year. Adjusted EPS was $3.00 versus $2.60 a year ago, an increase of 15.4%, driven largely by strong organic operating performance.
Read all positive updates
Company Guidance
For full-year 2026, Quest expects revenues to be between $12.065 billion and $12.105 billion, reflecting a growth rate of 9.3%-9.7%, reported EPS to be in a range of $10.21-$10.31, adjusted EPS in a range of $11.25-$11.35, cash from operations to be approximately $1.9 billion, and capital expenditures to be approximately $550 million; operating margin is expected to expand versus the prior year, share count is expected to be slightly below 2025, adjusted effective tax rate is expected to be consistent with 2025, and interest expense is now expected to be lower than 2025. Consumer health growth is expected to exceed 30% for the full year, Invigorate remains on track to deliver 3% in annual cost savings and productivity improvements, and Project Nova is expected to have an EPS impact of $0.25, with approximately 70% of these expenses to be incurred in the second half of this year. For 2027, the PAMA impact is estimated at approximately 1% of total company revenues, with the cumulative impact expected to be less than 1.3% of total revenues for years 2027 through 2029; Quest intends to offset some of this anticipated headwind, expects utilization to continue at the same levels, and expects to maintain a flattish outlook in terms of pricing across its third-party payer partners, ex PAMA.Quest Diagnostics Financial Statement Overview
Summary
Income Statement
72
Positive
Balance Sheet
68
Positive
Cash Flow
74
Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 11.84B | 11.04B | 9.87B | 9.25B | 9.88B | 10.79B |
| Gross Profit | 3.92B | 3.52B | 3.24B | 3.07B | 3.43B | 4.21B |
| EBITDA | 2.30B | 2.19B | 1.89B | 1.73B | 1.82B | 3.16B |
| Net Income | 1.13B | 992.00M | 871.00M | 854.00M | 946.00M | 2.00B |
Balance Sheet | ||||||
| Total Assets | 17.22B | 16.23B | 16.15B | 14.02B | 12.84B | 13.61B |
| Cash, Cash Equivalents and Short-Term Investments | 797.00M | 420.00M | 549.00M | 686.00M | 315.00M | 872.00M |
| Total Debt | 6.29B | 6.92B | 7.09B | 5.50B | 4.71B | 4.77B |
| Total Liabilities | 9.19B | 8.94B | 9.26B | 7.60B | 6.83B | 7.05B |
| Stockholders Equity | 7.63B | 7.17B | 6.78B | 6.31B | 5.89B | 6.44B |
Cash Flow | ||||||
| Free Cash Flow | 1.38B | 1.36B | 909.00M | 864.00M | 1.31B | 1.83B |
| Operating Cash Flow | 1.95B | 1.89B | 1.33B | 1.27B | 1.72B | 2.23B |
| Investing Cash Flow | -646.00M | -631.00M | -2.55B | -1.06B | -543.00M | 21.00M |
| Financing Cash Flow | -939.00M | -1.39B | 1.08B | 160.00M | -1.73B | -2.54B |
Quest Diagnostics Technical Analysis
Positive
244.51
Price Trends
236.97
Positive
225.17
Positive
208.97
Positive
Market Momentum
1.30
Negative
59.55
Neutral
86.37
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For DGX, the sentiment is Positive. The current price of 244.51 is above the 20-day moving average (MA) of 233.91, above the 50-day MA of 236.97, and above the 200-day MA of 208.97, indicating a bullish trend. The MACD of 1.30 indicates Negative momentum. The RSI at 59.55 is Neutral, neither overbought nor oversold. The STOCH value of 86.37 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for DGX.
Quest Diagnostics Risk Analysis
Quest Diagnostics disclosed 27 risk factors in its most recent earnings report. Quest Diagnostics reported the most risks in the "Tech & Innovation" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Quest Diagnostics Peers Comparison
UnderperformOutperform
Sector (51)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
74 Outperform | $10.38B | 25.84 | 11.60% | 5.24% | 2.96% | 9.52% | |
73 Outperform | $26.70B | 23.76 | 15.21% | 1.40% | 9.13% | 17.93% | |
67 Neutral | $58.23B | -297.02 | -11.73% | ― | 37.82% | 28.02% | |
61 Neutral | $44.57B | 112.85 | 1.88% | ― | 52.47% | -63.86% | |
60 Neutral | $22.69B | -48.45 | 211.46% | ― | 42.74% | -4.60% | |
51 Neutral | $7.86B | -0.30 | -43.30% | 2.27% | 22.53% | -2.21% |
* Healthcare Sector Average
DGX
Quest Diagnostics
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64.61
36.45%
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169.08
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Quest Diagnostics Corporate Events
Business Operations and StrategyRegulatory Filings and Compliance
Quest Diagnostics Investigates Cybersecurity Breach in Quanum LSM
Negative
Oct 22, 2026
On October 21, 2026, Quest Diagnostics discovered unauthorized access to its Quanum LSM system, which some clients use to submit test orders and retrieve laboratory results, and believes certain patient records were accessed. The company activated...
Business Operations and StrategyExecutive/Board Changes
Quest Diagnostics announces executive transition and leadership continuity
Positive
Oct 6, 2026
On October 6, 2026, Quest Diagnostics announced that long-time executive Catherine T. Doherty will retire in July 2027, with a transition beginning November 1, 2026 to a new role as Executive Vice President overseeing health systems, the company&#...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.