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Quest Diagnostics
(NYSE:DGX)
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Rating:69Neutral
Price Target:
$254.00
▲(3.88% Upside)
Action:Downgraded
Date:10/07/26
DGX scores as a solid, steady business: dependable financial performance (revenue expansion with healthy margins) and a notably positive earnings outlook (raised 2026 guidance and strong Q2 momentum) support the rating. The score is held back by weaker near-term technicals, moderate leverage and softer cash conversion/FCF trends, plus near-term margin and reimbursement (PAMA/ACA) uncertainties.
Positive Factors
Strong volume and revenue growth
Double-digit requisition and revenue growth indicates broadening demand for Quest’s diagnostic services, supported by both organic expansion and major health-system relationships. Sustained volume growth can improve network utilization, deepen customer relationships, and provide a durable foundation for earnings growth.
Negative Factors
Medicare reimbursement pressure
The proposed CMS rate alignment creates a multi-year reimbursement headwind for laboratory services, with final rates still pending and reductions scheduled to phase in through 2029. Lower government payment rates could pressure revenue per test and require continued productivity gains to protect profitability.
Read all positive and negative factors
Positive Factors
Negative Factors
Strong volume and revenue growth
Double-digit requisition and revenue growth indicates broadening demand for Quest’s diagnostic services, supported by both organic expansion and major health-system relationships. Sustained volume growth can improve network utilization, deepen customer relationships, and provide a durable foundation for earnings growth.
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
$25.49B
Dividend Yield1.46%
Average Volume (3M)1.08M
Price to Earnings (P/E)24.2
Beta (1Y)<0.01
Revenue Growth9.87%
EPS Growth12.51%
CountryUS
Employees51,500
SectorHealthcare
Sector Strength45
IndustryMedical - Diagnostics & Research
Share Statistics
EPS (TTM)9.54
Shares Outstanding110,373,360
10 Day Avg. Volume1,116,868
30 Day Avg. Volume1,082,327
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 Cap1.17
Enterprise Value/Revenue2.58
Enterprise Value/Gross Profit7.80
Enterprise Value/Ebitda13.42
Forecast
1Y Price Target
$256.00Price Target Upside4.70% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering11
EPS Forecast (FY)11.2
Revenue Forecast (FY)$12.01B
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:Jul 23, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Oct 22, 2026
Earnings Call Sentiment Positive
The call presented strong operational and commercial momentum: double-digit revenue growth, robust volume expansion, notable diagnostic and commercial milestones (Haystack MRD approval, Flatiron integration), meaningful adjusted EPS growth (+19.1%) and a raised full-year guide. Offsetting these positives are short-term margin pressures (70 bps headwind in Q2 from Nova ramp, Corewell/Fresenius mix and deferred compensation), higher expected H2 costs (fuel and Nova), and regulatory reimbursement risk (PAMA uncertainty and a ~30 bps ACA headwind). On balance, the positives (top-line strength, EPS improvement, raised guidance, product/partnership milestones, and productivity/automation investments) significantly outweigh the headwinds.Positive Updates
Strong Top-Line Growth
Consolidated revenues of $3.04 billion, up 10.2% year-over-year; consolidated organic revenue growth of 10.0%; Diagnostic Information Services revenue up 10.3% (10.1% organic).
Negative Updates
Quarterly Margin Pressure
Adjusted operating income margin was 16.5% in Q2, down from 16.9% the prior year (40 basis point reduction); reported operating margin was 15.1% vs. 15.9% prior year.
Read all updates
Q2-2026 Updates
Positive
Negative
Strong Top-Line Growth
Consolidated revenues of $3.04 billion, up 10.2% year-over-year; consolidated organic revenue growth of 10.0%; Diagnostic Information Services revenue up 10.3% (10.1% organic).
Read all positive updates
Company Guidance
Quest reaffirmed and raised full‑year 2026 guidance to revenues of $11.95–$12.05 billion (growth of 8.3%–9.2%), reported EPS of $9.97–$10.17 and adjusted EPS of $11.05–$11.25, with cash from operations of about $1.8 billion and capital expenditures of roughly $550 million; guidance excludes prospective M&A, assumes operating margin expansion versus 2025, a share count slightly below 2025, interest expense and adjusted effective tax rate roughly consistent with 2025. Management said Project Nova expenses remain unchanged for the year but now expect ~70% of Nova spend in H2 (versus prior ~60%), expect higher fuel costs in H2 (roughly a $10 million headwind), and cited strong H1 results (Q2 revenues $3.04 billion, +10.2%; Q2 adjusted EPS $3.12, +19.1%) as the basis for the raise.Quest Diagnostics Financial Statement Overview
Summary
Income Statement
76
Positive
Balance Sheet
71
Positive
Cash Flow
67
Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 11.56B | 11.04B | 9.87B | 9.25B | 9.88B | 10.79B |
| Gross Profit | 3.83B | 3.52B | 3.24B | 3.07B | 3.43B | 4.21B |
| EBITDA | 2.23B | 2.19B | 1.89B | 1.73B | 1.82B | 3.16B |
| Net Income | 1.06B | 992.00M | 871.00M | 854.00M | 946.00M | 2.00B |
Balance Sheet | ||||||
| Total Assets | 16.94B | 16.23B | 16.15B | 14.02B | 12.84B | 13.61B |
| Cash, Cash Equivalents and Short-Term Investments | 626.00M | 420.00M | 549.00M | 686.00M | 315.00M | 872.00M |
| Total Debt | 6.38B | 6.92B | 7.09B | 5.50B | 4.71B | 4.77B |
| Total Liabilities | 9.12B | 8.94B | 9.26B | 7.60B | 6.83B | 7.05B |
| Stockholders Equity | 7.52B | 7.17B | 6.78B | 6.31B | 5.89B | 6.44B |
Cash Flow | ||||||
| Free Cash Flow | 1.22B | 1.36B | 909.00M | 864.00M | 1.31B | 1.83B |
| Operating Cash Flow | 1.77B | 1.89B | 1.33B | 1.27B | 1.72B | 2.23B |
| Investing Cash Flow | -678.00M | -631.00M | -2.55B | -1.06B | -543.00M | 21.00M |
| Financing Cash Flow | -1.08B | -1.39B | 1.08B | 160.00M | -1.73B | -2.54B |
Quest Diagnostics Technical Analysis
Neutral
244.51
Price Trends
236.66
Negative
220.72
Positive
205.78
Positive
Market Momentum
-1.91
Positive
45.15
Neutral
31.64
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For DGX, the sentiment is Neutral. The current price of 244.51 is above the 20-day moving average (MA) of 235.69, above the 50-day MA of 236.66, and above the 200-day MA of 205.78, indicating a neutral trend. The MACD of -1.91 indicates Positive momentum. The RSI at 45.15 is Neutral, neither overbought nor oversold. The STOCH value of 31.64 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral 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 | $9.35B | 23.27 | 11.60% | 5.82% | 2.96% | 9.52% | |
69 Neutral | $25.49B | 24.21 | 14.49% | 1.46% | 9.87% | 12.51% | |
67 Neutral | $57.76B | -294.64 | -11.73% | ― | 37.82% | 28.02% | |
61 Neutral | $42.62B | 107.90 | 1.88% | ― | 52.47% | -63.86% | |
60 Neutral | $22.47B | -47.99 | 211.46% | ― | 42.74% | -4.60% | |
51 Neutral | $7.86B | -0.30 | -43.30% | 2.27% | 22.53% | -2.21% |
* Healthcare Sector Average
DGX
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Quest Diagnostics Corporate Events
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.