Labcorp Holdings (LH) AI Stock Analysis

• Market Cap: $19.28B
• Dividend Yield: 1.32%
• Average Volume (3M): 743.27K
• Price to Earnings (P/E): 26.1
• Beta (1Y): 0.39
• Revenue Growth: 0.83%
• EPS Growth: 89.55%
• Country: US
• Employees: 60,900
• Sector: Healthcare
• Sector Strength: 74
• Industry: Medical - Equipment & Services
• EPS (TTM): 8.84
• Shares Outstanding: 83,668,570
• 10 Day Avg. Volume: 860,151
• 30 Day Avg. Volume: 743,266
• PEG Ratio: 0.29
• Price to Book (P/B): N/A
• Price to Sales (P/S): 1.51
• Price to Cash Flow (P/CF): 6.30
• P/FCF Ratio: 6.90
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $276.71
• Price Target Upside: 20.06% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 15

Labcorp Holdings shows strong financial stability with robust cash flow and moderate revenue growth. Positive earnings call guidance supports a favorable outlook. However, premium valuation and potential margin pressures warrant caution. The overall score reflects a stable but cautiously optimistic view of Labcorp's stock potential.

Positive Factors

Earnings

Labcorp Holdings posted solid fourth-quarter results, surpassing expectations with sales of $3.33 billion and adjusted EPS of $3.45.

Financial Performance

The company provided 2025 guidance that assumes 7.4% revenue growth at the midpoint, driven by strong diagnostic laboratory revenue growth.

Strategic Focus

Mergers and acquisitions remain a strategic focus, contributing significantly to growth and supported by a robust pipeline of potential deals.

Negative Factors

Backlog

Backlog decreased ~3.2% due to foreign exchange.

Margins

Margins were light on transient items despite solid sales and EPS performance.

Labcorp Holdings Business Overview & Revenue Model

Company Description

Laboratory Corporation of America Holdings operates as a global life sciences company that provides vital information to help doctors, hospitals, pharmaceutical companies, researchers, and patients make clear and confident decisions. It operates in two segments, Labcorp Diagnostics (Dx) and Labcorp Drug Development (DD). It offers various tests, such as blood chemistry analyses, urinalyses, blood cell counts, thyroid tests, PAP tests, hemoglobin A1C and vitamin D, prostate-specific antigens, tests for sexually transmitted diseases, hepatitis C tests, microbiology cultures and procedures, and alcohol and other substance-abuse tests. The company also provides specialty testing services comprising gene-based and esoteric testing; advanced tests target specific diseases, including anatomic pathology/oncology, cardiovascular disease, coagulation, diagnostic genetics, endocrinology, infectious disease, women's health, pharmacogenetics, and parentage and donor testing; and occupational testing services, medical drug monitoring services, chronic disease programs, and kidney stone prevention tests. It provides online and mobile applications to enable patients to check test results; and online applications for managed care organizations and accountable care organizations. It offers end-to-end drug development, medical device, and companion diagnostic development solutions from early-stage research to clinical development and commercial market access. It serves managed care organizations, pharmaceutical, biotechnology, medical device and diagnostics companies, governmental agencies, physicians and other healthcare providers, hospitals and health systems, employers, patients and consumers, contract research organizations, and independent clinical laboratories. Laboratory Corporation of America Holdings has a collaboration agreement with Tigerlily Foundation to increase clinical trial diversity for women of color. The company was incorporated in 1994 and is headquartered in Burlington, North Carolina.

How the Company Makes Money

Labcorp makes money through its two main business segments: Labcorp Diagnostics and Labcorp Drug Development. Labcorp Diagnostics generates revenue by offering a variety of clinical laboratory testing services, including routine testing, specialty testing, and genetic testing, to healthcare providers, patients, and managed care organizations. This segment is supported by a robust network of laboratories and patient service centers. Labcorp Drug Development, formerly known as Covance, provides contract research services to pharmaceutical and biotechnology companies. It supports drug development from early-stage research to clinical trials and regulatory approval, generating revenue through service contracts and partnerships with pharmaceutical firms. Additionally, Labcorp collaborates with hospitals, health systems, and large healthcare organizations, leveraging its extensive infrastructure and expertise to drive growth in both its diagnostic and drug development services.

Labcorp Holdings Financial Statement Overview

Summary

Labcorp Holdings demonstrates solid financial health with strong cash flow generation and improved leverage. Revenue growth and margin stability are positive, but there's room for enhancing profitability. The balance sheet is strong, yet improving asset efficiency could boost returns.

Income Statement

Labcorp Holdings shows a solid improvement in its financial performance over the TTM (Trailing-Twelve-Months) period. The gross profit margin stands at 26.9%, and the net profit margin is 5.7%, indicating efficient cost management. Revenue growth rate of 7.0% from the previous year is a positive sign, although it remains lower than past growth rates. The EBIT margin at 8.5% and EBITDA margin at 12.1% indicate operational efficiency, despite being lower than historical highs.

Balance Sheet

The balance sheet reflects a stable position with an equity ratio of 43.8%, showcasing a strong equity base. The debt-to-equity ratio decreased to 0.24, indicating reduced leverage and financial risk. However, the return on equity at 9.3% reflects a decrease in profitability compared to historical performance, suggesting a need for better asset utilization.

Cash Flow

Labcorp's cash flow is robust with an impressive operating cash flow to net income ratio of 2.13, highlighting strong cash generation from operations. The free cash flow growth rate is 25.3%, reflecting effective capital expenditure management. A free cash flow to net income ratio of 1.47 further emphasizes the company's ability to generate surplus cash.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
13.01B	12.16B	14.88B	16.12B	13.98B
	Gross Profit
3.50B	3.36B	4.39B	5.62B	4.95B
	EBIT
1.11B	725.60M	1.77B	3.26B	2.45B
	EBITDA
1.81B	1.35B	1.95B	4.28B	3.25B
	Net Income Common Stockholders
746.00M	418.00M	1.28B	2.38B	1.56B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
1.52B	536.80M	430.00M	1.47B	1.32B
	Total Assets
18.38B	16.73B	20.16B	20.39B	20.07B
	Total Debt
7.27B	5.95B	6.29B	6.34B	6.76B
	Net Debt
5.75B	5.42B	5.86B	4.87B	5.44B
	Total Liabilities
10.31B	8.83B	10.06B	10.11B	10.71B
	Stockholders Equity
8.05B	7.88B	10.10B	10.27B	9.36B
Cash Flow		Free Cash Flow
1.10B	874.10M	1.47B	2.65B	1.75B
	Operating Cash Flow
1.59B	1.33B	1.96B	3.11B	2.14B
	Investing Cash Flow
-1.37B	-1.17B	-1.65B	-884.60M	-643.20M
	Financing Cash Flow
779.90M	-59.30M	-1.32B	-2.07B	-517.40M

Labcorp Holdings Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 230.48
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For LH, the sentiment is Negative. The current price of 230.48 is below the 20-day moving average (MA) of 232.29, below the 50-day MA of 241.43, and above the 200-day MA of 228.67, indicating a bearish trend. The MACD of -3.72 indicates Positive momentum. The RSI at 37.73 is Neutral, neither overbought nor oversold. The STOCH value of 27.94 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for LH.

Labcorp Holdings Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ICLR	81 Outperform	$12.56B	16.30	8.44%	―	1.99%	28.86%
DGX	76 Outperform	$1.91B	21.41	13.24%	1.88%	6.70%	2.56%
IQV	74 Outperform	$27.68B	20.95	22.55%	―	2.95%	2.46%
THC	72 Outperform	$12.47B	4.07	110.75%	―	0.57%	440.71%
LH	68 Neutral	$19.28B	26.08	9.37%	1.32%	0.83%	89.55%
BIIB	65 Neutral	$17.64B	10.78	10.36%	―	-1.60%	39.71%
Sector *	48 Neutral	$6.36B	1.24	-44.94%	2.70%	18.33%	1.47%

Labcorp Holdings Corporate Events

Labcorp Holdings Declares Cash Dividend for Shareholders

On April 10, 2025, Labcorp Holdings Inc. announced that its Board of Directors declared a cash dividend of $0.72 per share of common stock, payable on June 11, 2025, to stockholders of record as of May 29, 2025. This decision underscores Labcorp’s commitment to returning value to its shareholders and reflects its stable financial position, potentially enhancing its attractiveness to investors.

Spark’s Take on LH Stock

According to Spark, TipRanks’ AI Analyst, LH is a Outperform.

Labcorp Holdings shows strong financial stability with robust cash flow and moderate revenue growth. Positive earnings call guidance and technical indicators support a favorable outlook. However, premium valuation and potential margin pressures warrant caution. The overall score reflects a stable but cautiously optimistic view of Labcorp’s stock potential.

To see Spark’s full report on LH stock, click here.

Labcorp Holdings to Announce Q1 2025 Financial Results

Labcorp Holdings Inc. announced it will release its financial results for the first quarter of 2025 on April 29, 2025, before the market opens. The company will host a conference call and webcast at 9 a.m. ET on the same day to discuss the results, with the earnings press release and financial information available on the Labcorp Investor Relations website.

Labcorp to Participate in J.P. Morgan Healthcare Conference

Labcorp announced that its executive management team will participate in a fireside chat at the 43rd Annual J.P. Morgan Healthcare Conference on January 14, 2025. This participation highlights Labcorp’s ongoing engagement with key industry events, signaling its commitment to maintaining a strong presence in the healthcare sector and providing insights into its strategic direction for stakeholders.

Labcorp Declares Quarterly Cash Dividend for 2025

Labcorp Holdings Inc. announced that its Board of Directors has declared a quarterly cash dividend of $0.72 per share of common stock, payable on March 12, 2025, to stockholders of record as of February 27, 2025. This decision reflects the company’s strong financial standing and commitment to delivering value to its shareholders while maintaining its position as a leader in the laboratory services industry.