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Labcorp Holdings (LH)
NYSE:LH
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Labcorp Holdings
(NYSE:LH)
73Outperform
Positive Factors
Company Strategy
Hospital outreach M&A and collaboration activity are being used by LH to bolster volume growth and improve overall margins.
Financial Performance
Labcorp's first-quarter results were 3% ahead of consensus earnings per share.
Guidance and Outlook
Management reiterated its full-year revenue guidance and raised its adjusted EPS outlook by $0.05 to $16.05.
Negative Factors
Industry Risks
The FDA's plan to phase out animal testing could be a potential overhang for Labcorp Holdings' Early Development unit.
Revenue Expectations
Labcorp fell short of consensus revenue expectations by 2% due to weather-related headwinds impacting diagnostics and lower COVID-19 vaccine revenue.
Segment Performance
Both the Lab segment and Biopharma Laboratory Services came in below expectations, indicating challenges in meeting revenue targets.
Labcorp Holdings (LH) vs. S&P 500 (SPY)
Market Cap
$20.72B
Dividend Yield1.16%
Average Volume (3M)916.53K
Price to Earnings (P/E)28.6
Beta (1Y)0.43
Revenue Growth7.13%
EPS Growth74.73%
CountryUS
Employees60,900
SectorHealthcare
Sector Strength57
IndustryMedical - Equipment & Services
Share Statistics
EPS (TTM)8.67
Shares Outstanding83,668,570
10 Day Avg. Volume994,472
30 Day Avg. Volume916,535
Financial Highlights & Ratios
PEG Ratio0.38
Price to Book (P/B)N/A
Price to Sales (P/S)0.00
Price to Cash Flow (P/CF)0.00
P/FCF Ratio0.00
Enterprise Value/Market Cap1.24
Enterprise Value/RevenueN/A
Enterprise Value/Gross Profit7.36
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$271.09Price Target Upside9.46% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering15
Labcorp Holdings Business Overview & Revenue Model
Company DescriptionLabcorp Holdings (LH) is a leading global life sciences company that provides comprehensive clinical laboratory and end-to-end drug development services. Operating in the healthcare sector, Labcorp offers a wide range of diagnostic solutions, including routine blood tests, genomic testing, and specialty testing services. The company serves healthcare providers, pharmaceutical companies, and other entities, contributing to medical research and clinical trial development.
How the Company Makes MoneyLabcorp 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 Key Performance Indicators (KPIs)
Any
Revenue by Segment
Shows revenue generated by each business unit, indicating which areas are contributing most to growth and where diversification or strategic focus might be needed.
Shows revenue generated by each business unit, indicating which areas are contributing most to growth and where diversification or strategic focus might be needed.
Data provided by:
Main Street Data
Main Street DataLabcorp Holdings Financial Statement Overview
Summary
Labcorp Holdings presents a solid financial position with stable income, a well-structured balance sheet, and strong cash flow generation. While growth is moderate, profitability and cash flow metrics suggest operational efficiency and effective financial management.Income Statement
Labcorp Holdings exhibits moderate profitability and growth. The TTM gross profit margin is strong at 27.41%, and the net profit margin stands at 5.54%. Revenue growth rate from the previous year is 1.29%, indicating stable but slow growth. EBIT and EBITDA margins are at 8.37% and 12.37%, respectively, showing a healthy operational efficiency.75
Positive
Balance Sheet
The balance sheet is stable with a debt-to-equity ratio of 0.78, reflecting manageable leverage. Return on equity is moderate at 8.79%, indicating decent shareholder returns. The equity ratio is 47.20%, suggesting a balanced capital structure between debt and equity.70
Positive
Cash Flow
Cash flow metrics are robust, with a free cash flow growth rate of 5.12% over the previous year. The operating cash flow to net income ratio is 2.24, indicating strong cash generation relative to profits. Free cash flow to net income ratio is 1.58, further supporting the company's solid cash flow position.80
Positive
| 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 |
| 1.09B | 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
Positive
247.66
Price Trends
236.05
Positive
236.84
Positive
230.57
Positive
Market Momentum
2.01
Negative
65.08
Neutral
96.20
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For LH, the sentiment is Positive. The current price of 247.66 is above the 20-day moving average (MA) of 227.10, above the 50-day MA of 236.05, and above the 200-day MA of 230.57, indicating a bullish trend. The MACD of 2.01 indicates Negative momentum. The RSI at 65.08 is Neutral, neither overbought nor oversold. The STOCH value of 96.20 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for LH.
Labcorp Holdings Risk Analysis
Labcorp Holdings disclosed 46 risk factors in its most recent earnings report. Labcorp Holdings reported the most risks in the “Legal & Regulatory” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Labcorp Holdings Peers Comparison
Overall Rating
UnderperformOutperform
Sector (52)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
79 Outperform | $19.87B | 22.49 | 13.35% | 1.71% | 9.38% | 6.43% | |
78 Outperform | $11.78B | 3.84 | 38.12% | ― | -1.79% | -41.85% | |
73 Outperform | $20.72B | 28.57 | 8.98% | 1.16% | 7.13% | 74.73% | |
72 Outperform | $27.06B | 20.47 | 22.55% | ― | 2.95% | 2.46% | |
68 Neutral | $18.10B | 12.20 | 9.19% | ― | 2.28% | 26.10% | |
64 Neutral | $11.55B | 14.99 | 8.44% | ― | 1.99% | 28.86% | |
52 Neutral | $5.35B | 3.96 | -42.60% | 2.86% | 17.58% | 1.27% |
* Healthcare Sector Average
Performance Comparison
LH
Labcorp Holdings
247.66
49.14
24.75%
BIIB
Biogen
123.53
-97.89
-44.21%
ICLR
Icon
142.96
-172.18
-54.64%
DGX
Quest Diagnostics
177.95
45.01
33.86%
THC
Tenet Healthcare
148.03
25.67
20.98%
IQV
IQVIA Holdings
153.48
-73.56
-32.40%
Labcorp Holdings Earnings Call Summary
Earnings Call Date:Apr 29, 2025
(Q1-2025)
| % Change Since: 7.87%|
Next Earnings Date:Jul 31, 2025
Earnings Call Sentiment Positive
The earnings call presented a generally positive outlook with strong revenue growth, strategic acquisitions, and innovative test launches. However, there were concerns regarding tariff impacts, regulatory changes, and weather-related disruptions affecting margins.Q1-2025 Updates
Positive Updates
Strong Revenue Growth
Revenue for Q1 2025 was $3.3 billion, up 5.3% compared to last year, driven by organic growth of 2.1% and net acquisitions of 3.7%, partially offset by a foreign currency translation of 0.5%.
Diagnostics Laboratories Business Performance
Diagnostics Laboratories business showed a 6% growth. Adjusted operating income for the quarter was $428 million or 16.3% of revenue.
Biopharma Laboratory Services Segment Growth
Biopharma laboratory services segment grew 3% excluding currency. Margin for BLS was strong, improving 80 basis points, with a quarterly book to bill at 1.13.
New Strategic Collaborations and Acquisitions
Strategic collaborations with Inspira Health and acquisitions of assets from BioReference Health and North Mississippi Health Services were announced, expanding leadership in oncology and other areas.
Innovative Test Launches
Introduced several new tests, including a groundbreaking liquid biopsy test for cancer treatment and a new blood-based biomarker test for Alzheimer's diagnosis.
Adjusted EPS Increase
Adjusted EPS was $3.84, up 4% from last year, with the midpoint of EPS guidance increased by $0.05 per share.
Negative Updates
Impact of Weather Conditions
Organic growth was impacted by approximately 90 basis points from weather and one fewer revenue day.
Margin Pressure in Diagnostics
Diagnostics adjusted operating margin was down 60 basis points due to Invitae and weather.
Tariff and Regulatory Concerns
Anticipation of impact from tariffs and regulatory changes, with contingency planning for various scenarios.
COVID-19 Related Cancellations
Cancellation of a large COVID trial impacted the book to bill ratio in BLS.
Company Guidance
In the Q1 2025 earnings call for Laboratory Corporation of America Holdings, the company reported a solid 5% increase in revenue, with growth in both its Diagnostics Laboratories and Biopharma Laboratory Services (BLS) segments. The Diagnostics segment saw a 6% revenue rise, driven by a recovery from weather impacts earlier in the year, while BLS grew by 3% when adjusted for currency fluctuations. Adjusted earnings per share increased by 4% to $3.84, prompting the company to raise the midpoint of its EPS guidance by $0.05, reflecting an implied growth of approximately 10% for the year. The company maintained its revenue and free cash flow guidance, with expected enterprise revenue growth between 6.7% and 8%. Key strategic moves included partnerships and acquisitions aimed at expanding their market presence in oncology and other high-growth areas, while technological innovations, such as the launch of new consumer-initiated tests and advanced diagnostic tools, are expected to drive future growth. Despite facing macroeconomic challenges like tariff implications, Labcorp emphasized its readiness to manage these impacts through cost efficiencies and operational flexibility.Labcorp Holdings Corporate Events
Dividends
Labcorp Holdings Declares Cash Dividend for Shareholders
Positive
Apr 10, 2025
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.
Financial Disclosures
Labcorp Holdings to Announce Q1 2025 Financial Results
Neutral
Mar 31, 2025
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.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
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.