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Quest Diagnostics (DGX)
NYSE:DGX
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Quest Diagnostics
(NYSE:DGX)
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Rating:70Neutral
Price Target:
$210.00
▲(1.06% Upside)
Action:ReiteratedDate:02/11/26
The score is driven primarily by a solid (but not peak-level) financial profile—improving growth but structurally lower margins and softer cash conversion—supported by constructive price momentum. Earnings-call guidance and operating execution tone are positive, while valuation is fair rather than compelling and near-term margin dilution/reimbursement risks temper upside.
Positive Factors
Strong Revenue Growth
The robust revenue growth, particularly organic growth, indicates strong demand for Quest's services and effective integration of acquisitions, supporting long-term business expansion.
Successful Collaborations
Strategic partnerships and joint ventures enhance Quest's service offerings and market reach, bolstering its competitive position and potential for sustained growth.
Advanced Diagnostics Expansion
Expansion in advanced diagnostics positions Quest as a leader in specialized testing, meeting growing healthcare needs and driving future revenue streams.
Negative Factors
Potential Impact of PAMA
Potential PAMA-related payment cuts could reduce revenue from Medicare services, impacting Quest's financial performance and market position.
Higher Employee Health Costs
Rising employee healthcare costs can pressure margins, affecting profitability and financial flexibility in the long term.
Investment Costs
High investment costs for Project Nova could strain short-term margins, though they may support long-term growth if successful.
Quest Diagnostics (DGX) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$23.31B
Dividend Yield1.8%
Average Volume (3M)1.09M
Price to Earnings (P/E)23.9
Beta (1Y)0.16
Revenue Growth13.74%
EPS Growth14.87%
CountryUS
Employees55,000
SectorHealthcare
Sector Strength45
IndustryMedical - Diagnostics & Research
Share Statistics
EPS (TTM)2.42
Shares Outstanding111,242,360
10 Day Avg. Volume942,320
30 Day Avg. Volume1,087,741
Financial Highlights & Ratios
PEG Ratio1.42
Price to Book (P/B)2.69
Price to Sales (P/S)1.75
P/FCF Ratio14.17
Enterprise Value/Market Cap1.27
Enterprise Value/Revenue2.68
Enterprise Value/Gross Profit8.07
Enterprise Value/Ebitda14.62
Forecast
1Y Price Target
$220.00Price Target Upside5.87% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering11
EPS Forecast (FY)10.63
Revenue Forecast (FY)$11.76B
Quest Diagnostics Business Overview & Revenue Model
Company DescriptionQuest 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 MoneyQuest Diagnostics generates revenue primarily through its laboratory services, which include a wide array of diagnostic tests performed on patient samples. The company operates on a fee-for-service model, billing healthcare providers, hospitals, and patients for the tests conducted. Key revenue streams include clinical laboratory services, which constitute the bulk of its earnings, as well as revenue from its esoteric testing, which involves more complex and specialized tests. Additionally, Quest Diagnostics benefits from partnerships with health plans, hospitals, and physician practices that facilitate access to its services. The company also engages in strategic collaborations, such as with pharmaceutical companies for clinical trials and testing services, further enhancing its revenue potential.
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 Earnings Call Summary
Earnings Call Date:Feb 10, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:Apr 28, 2026
Earnings Call Sentiment Positive
The call conveyed strong organic growth, meaningful volume expansion, double-digit full-year revenue and EPS growth, a sizable increase in cash from operations, robust consumer and advanced diagnostics momentum, and clear cost-saving/automation progress. Near-term challenges include margin dilution from new low-margin CoLab ramping and implementation costs, a small decline in revenue-per-requisition driven by large-volume lower-price relationships, weather-related seasonality risk in early 2026, cash-flow comparatives due to one-time items, and unresolved structural/regulatory PAMA risks and some reimbursement uncertainties for new oncology tests. On balance the company presented positive operating and financial momentum with manageable near-term headwinds.Q4-2025 Updates
Positive Updates
Quarterly Revenue Growth
Consolidated revenues of $2.81B in Q4, up 7.1% year-over-year; consolidated organic revenues grew 6.4%.
Volume Expansion
Total requisitions increased 8.5% versus 2024 (organic volume +7.9%); excluding Corewell and Fresenius organic volume growth accelerated to 4.1%.
Earnings and Profitability Progress
Reported Q4 EPS $2.18 and adjusted EPS $2.42 vs prior year $1.95 and $2.23 (adjusted EPS up ~8.5% year-over-year); reported operating income $386M (13.8% of revenues) and adjusted operating income $429M (15.3%).
Full-Year Financial Achievements
Delivered double-digit growth in full-year revenues and EPS; cash from operations rose to $1.89B for 2025 from $1.33B in 2024 (approximately +42%).
Strong Consumer Channel Performance
Consumer channel delivered nearly $250M in revenue for the full year; direct-to-consumer (questhealth.com) grew strongly (approx. 35% growth for questhealth.com in 2025 and a ~$100M run-rate), and consumer-initiated testing exceeded the >20% growth expectation.
Advanced Diagnostics Momentum
Double-digit revenue growth across advanced diagnostic areas (autoimmune, brain health AD-Detect, oncology MRD, cardiometabolic); launched Analyzer autoimmune solution, 85-biomarker Elite Health Profile, flow MRD test for myeloma and continued AD-Detect adoption.
Operational Efficiency Achieved
INFIGURATE program achieved full-year target of 3% annual cost savings/productivity improvements in 2025; deployed automation and AI (automated sample processing, collaborative accessioning, Hologic system in two labs).
AI and Automation Benefits
Virtual AI agent reduced routine logistics calls by up to 50%; new AI logistics tool expected to reduce courier transportation times as rolled out in 2026.
Positive 2026 Guidance
2026 guidance: revenue $11.70B–$11.82B (growth 6.0%–7.1%); reported EPS $9.45–$9.65; adjusted EPS $10.50–$10.70; cash from operations ~ $1.75B; capex ~$550M; operating margin expected to expand.
Strategic Hospital and CoLab Expansion
CoLab Solutions expected to generate ~ $1B in annual revenue in 2026; Corewell CoLab relationship to add ~ $250M organic revenue in 2026 and a larger joint-lab buildout planned to serve Michigan in 2027.
Negative Updates
Margin Pressure from New Relationships and Investments
Adjusted operating margin declined to 15.3% in Q4 from 15.6% last year; Corewell CoLab (~$250M revenue) is expected at low single-digit margins in 2026 (dilutive in 2026, improving to low-teens by 2027) and Project Nova investment will dilute EPS by ~ $0.25 in 2026.
Revenue-per-Requisition Weakness
Total revenue per requisition was down 0.1% year-over-year in Q4, driven in part by high-volume, lower rev-per-rec relationships (Fresenius and Corewell); these relationships reduce aggregate rev/req trends despite strong volume growth.
Weather-Related Headwind and Seasonality Uncertainty
Severe weather in January 2026 created a larger near-term headwind than a year ago; company expects partial recovery but pacing for Q1 carries uncertainty and is embedded in full-year guidance.
Reduced Operating Cash Flow Guidance
2026 cash from operations guidance (~$1.75B) is lower than 2025 ($1.89B) due to reversal of one-time benefits in 2025 (~$150M) and one additional payroll cycle in 2026 (~$120M).
Regulatory and Reimbursement Risk (PAMA)
PAMA implementation delayed to 2026 providing short-term relief, but structural flaws remain (historically <1% of labs reported), creating risk of inaccurate payment rate-setting unless RESULTS Act reforms are adopted.
Reimbursement and Coverage Uncertainties for Some Oncology Tests
Haystack MRD and other oncology tests are progressing (PLA and MAC adjudication activity), but Medicare Advantage/MolDX assessments and broader commercial coverage remain works in progress, creating reimbursement risk and potential dilution until ramps.
Integration and Startup Costs
Startup and integration expenses tied to Fresenius Medical Care and Corewell Health, plus Project Nova and Epic contract timing, reduced operating income percent in the quarter and represent near-term execution costs.
Company Guidance
Quest’s 2026 guidance targets revenues of $11.70–$11.82 billion (growth of 6.0%–7.1%, excluding prospective M&A), reported EPS of $9.45–$9.65 and adjusted EPS of $10.50–$10.70, cash from operations of ~ $1.75 billion and capital expenditures of ~ $550 million; management expects operating margin to expand year‑over‑year even while absorbing roughly $0.25 of EPS dilution from Project Nova, the greater-than‑expected January severe‑weather headwind (already contemplated in the guide), and the Corewell CoLab contribution of ~ $250 million of organic revenue in 2026 at low single‑digit margins (CoLab Solutions overall expected to approach ~$1 billion in annual revenue in 2026); the outlook assumes price roughly flat, share count and interest expense consistent with 2025, and lower 2026 operating cash flow versus 2025 reflecting about $150 million of one‑time benefits in 2025 and one additional payroll cycle in 2026 of ~ $120 million.Quest Diagnostics Financial Statement Overview
Summary
Financials are solid but not best-in-class: revenue momentum has improved, but gross and net margins remain meaningfully below 2020–2021 levels. Leverage is manageable but still notable (debt-to-equity ~0.89 in 2025), and cash conversion has softened versus prior peaks despite healthy absolute free cash flow.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.68
Positive
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.72
Positive
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.64
Positive
| 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 | 2.15B | 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
Positive
207.80
Price Trends
186.52
Positive
184.51
Positive
179.83
Positive
Market Momentum
6.39
Negative
67.77
Neutral
66.34
Neutral
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 207.8 is above the 20-day moving average (MA) of 197.68, above the 50-day MA of 186.52, and above the 200-day MA of 179.83, indicating a bullish trend. The MACD of 6.39 indicates Negative momentum. The RSI at 67.77 is Neutral, neither overbought nor oversold. The STOCH value of 66.34 is Neutral, 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 |
|---|---|---|---|---|---|---|---|
73 Outperform | $28.98B | -92.74 | -29.02% | ― | 38.17% | -28.77% | |
72 Outperform | $10.03B | 23.74 | 11.57% | 3.31% | 5.32% | 336.29% | |
70 Neutral | $23.31B | 23.95 | 14.17% | 1.80% | 13.74% | 14.87% | |
69 Neutral | $32.01B | 29.67 | 29.28% | ― | 6.90% | 3.86% | |
64 Neutral | $19.75B | -93.49 | -8.66% | ― | 14.47% | -353.69% | |
54 Neutral | $12.51B | ― | ― | ― | 30.38% | 24.17% | |
51 Neutral | $7.86B | -0.30 | -43.30% | 2.27% | 22.53% | -2.21% |
* Healthcare Sector Average
DGX
Quest Diagnostics
207.80
39.38
23.38%
EXAS
Exact Sciences
103.27
55.45
115.96%
QGEN
Qiagen
48.62
10.35
27.06%
WAT
Waters
319.44
-53.62
-14.37%
NTRA
Natera
211.83
55.22
35.26%
GH
Guardant Health
95.27
53.16
126.24%
Quest Diagnostics Corporate Events
Business Operations and StrategyStock BuybackDividendsFinancial Disclosures
Quest Diagnostics Posts Strong 2025 Results, Boosts Shareholder Returns
Positive
Feb 10, 2026
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.
Business Operations and Strategy
Quest Diagnostics Highlights Growth Strategy at Healthcare Conference
Positive
Jan 12, 2026
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.
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.