Quest Diagnostics (DGX) AI Stock Analysis

• Market Cap: $21.82B
• Dividend Yield: 1.8%
• Average Volume (3M): 980.12K
• Price to Earnings (P/E): 19.4
• Beta (1Y): 0.18
• Revenue Growth: 13.74%
• EPS Growth: 14.87%
• Country: US
• Employees: 55,000
• Sector: Healthcare
• Sector Strength: 45
• Industry: Medical - Diagnostics & Research
• EPS (TTM): 2.42
• Shares Outstanding: 109,866,320
• 10 Day Avg. Volume: 730,306
• 30 Day Avg. Volume: 980,121
• PEG Ratio: 1.42
• Price to Book (P/B): 2.69
• Price to Sales (P/S): 1.75
• P/FCF Ratio: 14.17
• Enterprise Value/Market Cap: 1.31
• Enterprise Value/Revenue: 2.59
• Enterprise Value/Gross Profit: 7.79
• Enterprise Value/Ebitda: 14.07
• 1Y Price Target: $221.11
• Price Target Upside: 11.33% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 10
• EPS Forecast (FY): 10.63
• Revenue Forecast (FY): $11.76B

• Rating: 70 Neutral
• Price Target: $221.00 ▲(11.27% Upside)
• Action: Reiterated Date: 03/13/26
• Date: Action: Reiterated 03/13/26

DGX scores as solid overall, driven mainly by steady financial quality and a constructive 2026 outlook (guided growth and margin expansion). The score is tempered by structurally lower margins vs prior peaks, softer cash conversion, and mixed near-term technical momentum, while valuation appears reasonable but not a standout.

Positive Factors

Revenue growth & guidance

Management's 2026 revenue guidance (6.0%–7.1% growth) and recent re-acceleration indicate sustainable demand across physician, hospital and consumer channels. Over 2–6 months this supports durable top-line momentum, underpinned by national lab scale and major partnerships that drive recurring volume.

Advanced diagnostics expansion

Rapid growth and new product launches in molecular, oncology, autoimmune and brain-health diagnostics diversify revenue toward higher-value tests. These specialty offerings carry structurally higher margins and long commercialization tails, supporting sustained revenue mix improvement and competitive differentiation over quarters.

Productivity, automation & AI

Achieved multi-year productivity targets and is scaling automation/AI to lower unit costs. These structural efficiency gains improve margin durability and capacity to absorb low-margin contract ramps, supporting long-term operating leverage and freeing cash for strategic investments and shareholder returns.

Negative Factors

Structural margin compression

Margins remain materially below prior peak levels, reflecting mix shifts to high-volume lower-rev relationships and pricing pressures. Persistent margin compression limits free cash flow and reinvestment capacity, meaning margin recovery will require sustained higher-margin test growth or continued efficiency gains.

Weaker cash conversion

Declining FCF conversion reduces balance-sheet flexibility for M&A, capex and buybacks. With operating cash flow guidance set below 2025 and one-time timing effects evident, persistent weaker cash conversion could constrain strategic optionality and capacity to fund growth without raising leverage.

Regulatory & reimbursement risk (PAMA)

Ongoing uncertainty in Medicare payment-setting and reimbursement for novel oncology diagnostics creates structural pricing and coverage risk. If PAMA reforms or MolDX/Medicare adjudications unfavorably limit rates or coverage, revenue and margin ramps for advanced tests could be materially delayed.

Quest Diagnostics Business Overview & Revenue Model

Company Description

Quest Diagnostics Incorporated provides diagnostic testing, information, and services in the United States and internationally. The company develops and delivers diagnostic information services, such as routine testing, non-routine and advanced clinical testing, anatomic pathology testing, and other diagnostic information services. It offers diagnostic information services primarily under the Quest Diagnostics brand, as well as under the AmeriPath, Dermpath Diagnostics, ExamOne, and Quanum brands to patients, clinicians, hospitals, independent delivery networks, health plans, employers, direct contract entities, and accountable care organizations through a network of laboratories, patient service centers, phlebotomists in physician offices, call centers and mobile paramedics, nurses, and other health and wellness professionals. The company also provides risk assessment services for the life insurance industry; and healthcare organizations and clinicians robust information technology solutions. Quest Diagnostics Incorporated was founded in 1967 and is headquartered in Secaucus, New Jersey.

How the Company Makes Money

Quest Diagnostics primarily makes money by performing diagnostic tests and related services and receiving reimbursement from commercial insurers, government payers (e.g., Medicare/Medicaid), hospitals/health systems, employers, and out-of-pocket patients. Its core revenue stream is clinical laboratory testing volume multiplied by the net reimbursement rate, with revenue recognized when tests are performed and results are delivered; profitability depends on test mix (routine vs. higher-complexity esoteric testing), payer mix, and the company’s ability to run high-throughput labs efficiently. A meaningful portion of revenue comes from serving physicians and outpatient settings (tests ordered by clinicians and routed through Quest’s labs and patient service centers) as well as from health systems and hospitals via outreach testing programs and reference lab work. The company also earns revenue from advanced diagnostics (including molecular/genetic and anatomic pathology offerings), which typically carry higher pricing and require specialized capabilities. Additional revenue is generated through employer and consumer-focused testing solutions (e.g., occupational health and wellness testing), and from risk assessment/clinical decision support offerings tied to laboratory data where applicable. Key factors that contribute to earnings include contractual relationships with health plans and provider systems, scale advantages from a national laboratory network (driving lower unit costs), and the ability to expand test offerings and access through acquisitions and partnerships; specific partnership details are null.

Quest Diagnostics Financial Statement Overview

Summary

Solid but not best-in-class fundamentals: revenue growth has re-accelerated and the business remains profitable, but gross and net margins are well below the 2020–2021 peak. Leverage is manageable but meaningful, and cash conversion has softened (FCF ~72% of net income in 2025).

Income Statement

Revenue has re-accelerated recently (2024 up ~6.7% and 2025 up ~170.5% vs. 2023 down ~6.4%), but profitability is clearly below the 2020–2021 peak. Gross margin has compressed from ~38–39% (2020–2021) to ~33% (2024–2025), and net margin has normalized to ~9% in 2024–2025 versus ~15–18% in 2020–2021. Overall, the business looks profitable and improving on growth, but margins and earnings power appear structurally lower than a few years ago.

Balance Sheet

Leverage is moderate-to-elevated: debt-to-equity sits around ~0.89 in 2025 (improved from ~1.05 in 2024), but total debt has risen versus 2022–2023 levels. Equity has grown over time and returns on equity are solid (~13.8% in 2025), though below the outsized 2020–2021 period. Overall balance sheet quality is reasonable with manageable leverage, but debt has trended higher and is a key watch item.

Cash Flow

Cash generation is healthy in absolute dollars (2025 operating cash flow ~$1.89B; free cash flow ~$1.36B), but conversion has weakened versus earlier years. Free cash flow has declined slightly in 2025 (about -2.4% growth) after uneven results in prior years, and free cash flow is running at ~72% of net income in 2025 (below ~79–82% in 2020–2021). Operating cash flow also covers a smaller portion of net income in 2024–2025 than in 2020–2022, suggesting less consistent cash conversion.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	11.04B	9.87B	9.25B	9.88B	10.79B
Gross Profit	3.52B	3.24B	3.07B	3.43B	4.21B
EBITDA	2.19B	1.89B	1.73B	1.82B	3.16B
Net Income	992.00M	871.00M	854.00M	946.00M	2.00B
Balance Sheet
Total Assets	16.23B	16.15B	14.02B	12.84B	13.61B
Cash, Cash Equivalents and Short-Term Investments	420.00M	549.00M	686.00M	315.00M	872.00M
Total Debt	6.92B	7.09B	5.50B	4.71B	4.77B
Total Liabilities	8.94B	9.26B	7.60B	6.83B	7.05B
Stockholders Equity	7.17B	6.78B	6.31B	5.89B	6.44B
Cash Flow
Free Cash Flow	1.36B	909.00M	864.00M	1.31B	1.83B
Operating Cash Flow	1.89B	1.33B	1.27B	1.72B	2.23B
Investing Cash Flow	-631.00M	-2.55B	-1.06B	-543.00M	21.00M
Financing Cash Flow	-1.39B	1.08B	160.00M	-1.73B	-2.54B

Quest Diagnostics Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 198.61
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: 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 198.61 is below the 20-day moving average (MA) of 204.77, above the 50-day MA of 193.76, and above the 200-day MA of 181.93, indicating a neutral trend. The MACD of 1.26 indicates Positive momentum. The RSI at 46.57 is Neutral, neither overbought nor oversold. The STOCH value of 28.42 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for DGX.

Quest Diagnostics Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
QGEN	72 Outperform	$8.46B	23.17	11.85%	3.31%	5.32%	336.29%
DGX	70 Neutral	$21.82B	19.42	13.88%	1.80%	13.74%	14.87%
WAT	66 Neutral	$28.45B	35.17	28.52%	―	6.90%	3.86%
EXAS	65 Neutral	$19.82B	-92.15	-8.51%	―	14.47%	-353.69%
NTRA	62 Neutral	$28.02B	-150.47	-15.28%	―	38.17%	-28.77%
GH	54 Neutral	$11.44B	-30.76	164.85%	―	30.38%	24.17%
Sector *	51 Neutral	$7.86B	-0.30	-43.30%	2.27%	22.53%	-2.21%

Quest Diagnostics Corporate Events

Quest Diagnostics Adds Veteran Healthcare Leader to Board

On March 9, 2026, Quest Diagnostics’ board elected Timothy Wentworth, former CEO of Walgreens Boots Alliance, Evernorth Health Services and Express Scripts, as an independent director, expanding the board to 11 members. Wentworth, who received standard non‑employee director compensation including a prorated restricted share unit grant, will serve on the Compensation and Leadership Development Committee and the Quality and Compliance Committee.

The appointment brings to Quest a veteran executive with deep experience running large, complex healthcare and consumer-focused organizations, including overseeing Walgreens Boots Alliance’s restructuring ahead of its 2025 sale to Sycamore Partners. His track record in scaling pharmacy benefit management and health services businesses is expected to bolster Quest’s strategic capabilities across health plan, employer and consumer channels, strengthening board oversight of growth, operations and compliance.

The most recent analyst rating on (DGX) stock is a Buy with a $235.00 price target. To see the full list of analyst forecasts on Quest Diagnostics stock, see the DGX Stock Forecast page.

Quest Diagnostics Posts Strong 2025 Results, Boosts Shareholder Returns

On February 10, 2026, Quest Diagnostics reported that fourth-quarter 2025 revenue rose 7.1% year-on-year to $2.81 billion and full-year revenue increased 11.8% to $11.04 billion, with full-year diluted EPS up 13.8% to $8.75 and cash from operations reaching $1.89 billion. The Board also authorized an additional $1 billion share repurchase and raised the quarterly dividend 7.5% to $0.86 per share, effective for the dividend payable on April 20, 2026 to shareholders of record on April 6, 2026.

Management highlighted double-digit growth in 2025 as evidence of successful execution in clinical innovation, consumer testing, operational efficiency, and strategic collaborations, including major agreements with Corewell Health, Epic, and Google Cloud. For 2026, Quest guided revenues to $11.70 billion–$11.82 billion and reported diluted EPS to $9.45–$9.65, signaling confidence in sustained growth while it invests in AI, automation, and advanced diagnostics such as Alzheimer’s and cancer testing.

The most recent analyst rating on (DGX) stock is a Buy with a $210.00 price target. To see the full list of analyst forecasts on Quest Diagnostics stock, see the DGX Stock Forecast page.

Quest Diagnostics Highlights Growth Strategy at Healthcare Conference

On January 12, 2026, Quest Diagnostics outlined its growth strategy and operational priorities at the 44th Annual J.P. Morgan Healthcare Conference, emphasizing its role in an approximately $89 billion U.S. lab market and a roughly $5 billion Canadian lab market. Management detailed plans for above-market revenue growth by deepening penetration in physician and hospital channels, expanding Collaborative Lab Solutions and outreach arrangements, and leveraging its scale and technology to meet rising demand from enterprise healthcare customers. The company highlighted high-growth areas such as consumer-initiated testing, partnerships in the wellness ecosystem, and advanced diagnostics across cardiometabolic health, autoimmune disease, brain health, oncology, and women’s and reproductive health, with these specialty tests projected to approach $1 billion in revenue in 2025. Quest also stressed ongoing productivity and cost-savings initiatives, including automation and AI across lab and logistics operations, which are improving efficiency and customer satisfaction and are central to its strategy to drive sustainable growth and long-term value for stakeholders.

The most recent analyst rating on (DGX) stock is a Hold with a $195.00 price target. To see the full list of analyst forecasts on Quest Diagnostics stock, see the DGX Stock Forecast page.