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LabCorp: Labcorp's 2025 Earnings: A Strong Year with Promising Outlook

In 2025, Labcorp reported a robust financial performance, with enterprise revenue increasing by 7%, adjusted EPS growing by 13%, and margins improving by over 50 basis points. The company's Diagnostics revenue grew 6% with organic growth of over 4%, while Central Laboratory revenue increased 11% or 8% constant currency. The actual EPS came out at $1.98, missing estimates at $3.95. For the fourth quarter, enterprise revenue increased 6% with margins improving 120 basis points and adjusted EPS grew 18%.

LH

USD 263.8

0.34%

A-Score: 5.4/10

Publication date: February 17, 2026

Full Report

Author: Analystock.ai

📋 Highlights
  • 2025 Performance: 7% top-line growth, 13% adjusted EPS growth, and 50 bps margin improvement.
  • 2026 Guidance: 5.4% revenue growth (midpoint), 9% adjusted EPS growth, and $100–125M annual cost savings target.
  • Central Labs Growth: 11% Q4 revenue increase (8% constant currency), driven by oncology, neurology, and cardiometabolic demand.
  • Strategic Innovations: Launched 130+ new tests, including first FDA-cleared Alzheimer’s blood test in primary care.
  • Margin Expansion: BLS segment to outpace Diagnostics in margin improvement, with enterprise margins up 120 bps in Q4.

Segment Performance

The Diagnostics business was impacted by lower referrals from a large consumer genetic client due to financial challenges and weather, but would have been 2% growth without these factors. The Central Labs business saw strong demand, underscored by wins in oncology, neurology, and cardiometabolic studies. The company's specialty areas are expected to grow 2-3 times faster than the overall market.

Guidance and Outlook

For 2026, Labcorp expects full year enterprise revenue growth of 5.4% at the midpoint of its guidance, improved margins across both segments, and adjusted EPS growth of approximately 9%. The company is confident in its 2026 guidance, which includes 4.7-6% revenue growth and 9% EPS growth at the midpoint. As Julia Wang mentioned, "We expect another year of meaningful margin improvement by both segments, with BLS segment improving more than the Diagnostics segment."

Valuation and Metrics

With a P/E Ratio of 26.04, P/B Ratio of 2.65, and EV/EBITDA of 15.54, the market seems to have priced in a certain level of growth. Analysts estimate next year's revenue growth at 5.5%, which is in line with the company's guidance. The company's ROE is 10.28%, and ROIC is 6.75%, indicating a decent return on equity and invested capital. The Net Debt / EBITDA ratio is 3.22, which may be a concern for some investors.

Key Drivers

The company's growth is driven by its strong position in specialty testing, with 130 new tests launched last year, focusing on women's health, oncology, neurology, and autoimmune disease. The Central Labs business is expected to see solid organic mid-single-digit growth, driven by a strong trailing 12-month book-to-bill. The Early Development market is expected to be relatively flat in 2026, but improve as the year progresses.

LabCorp's A-Score