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1. Company Snapshot

1.a. 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.

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1.b. Last Insights on DGX

Quest Diagnostics' recent performance was driven by strong Q4 earnings and revenue growth. The company's consolidated revenues reached $2.81 billion, up 7.1% year-over-year, with organic revenue growth of 6.4% in the fourth quarter. Strategic collaborations and acquisitions, such as the Fresenius assets, have contributed to its growth. Additionally, increasing institutional ownership, with Alpha Cubed Investments LLC growing its stake by 1,589.0%, signals confidence in the company's prospects. Guidance for 2026 points to steady growth.

1.c. Company Highlights

2. Quest Diagnostics' 2025 Earnings: A Strong Finish with Growth Momentum

Quest Diagnostics reported consolidated revenues of $2.81 billion in the fourth quarter, up 7.1% versus the prior year, with consolidated organic revenues growing by 6.4%. The company's adjusted EPS was $2.42 in the quarter, beating estimates of $2.35. For the full year 2025, the company generated double-digit growth in revenues and earnings per share, driven by its category-defining clinical innovation and strategic collaborations.

Publication Date: Feb -17

📋 Highlights
  • 2025 Revenue & Earnings Growth:: Generated double-digit revenue (+7.1% to $2.81B) and EPS growth ($2.42 in Q4) year-over-year, with full-year 2025 EPS at $8.65 (up 13.5% vs. prior year).
  • Consumer Business Expansion:: Direct-to-consumer platform (questhealth.com) delivered $250M in revenue (35% YoY growth) and is projected to grow >20% in 2026 due to partnerships and AI-driven diagnostics.
  • Alzheimer’s & Autoimmune Testing:: Double-digit revenue growth in advanced diagnostics, including Alzheimer’s and autoimmune portfolios, driven by high-demand chronic disease management and innovation.
  • 2026 Guidance & Margin Outlook:: 6-7.1% revenue growth and $10.50–$10.70 adjusted EPS expected, with operating margin expansion (13.8% in Q4 2025) despite lower-margin Corewell/Fresenius integration.
  • PAMA Delay Impact:: One-year delay in PAMA rate cuts provides short-term relief but not structural fixes; advocacy for the RESULTS Act to address long-term pricing challenges, critical for 2026 stability.

Revenue Growth Drivers

The company's consumer-initiated test platform, questhealth.com, delivered nearly $250 million in revenues for the full year, exceeding expectations of 20% growth. Advanced diagnostics portfolio, including autoimmune and brain health, also delivered double-digit revenue growth. The company's guidance for 2026 reflects continued confidence in its business strengths and market fundamentals, with expected revenue growth of 6% to 7.1% and adjusted EPS of $10.50 to $10.70.

Margin Profile and Operating Performance

The company's operating margin is expected to increase in 2026 versus 2025, despite the impact of the ramp of Corewell and Fresenius businesses at lower margins. Organic volumes are expected to drive margin expansion, with price being relatively flat year-over-year. The consumer business is expected to grow at 20% and is a help from a margin rate standpoint, with no denials, patient concessions, or bad debt.

Valuation and Growth Expectations

With a P/E Ratio of 23.15 and an expected revenue growth rate of 6-7.1% in 2026, the market is pricing in a certain level of growth momentum for Quest Diagnostics. The company's ROE of 13.88% and ROIC of 8.21% indicate a strong return on equity and invested capital. Analysts estimate next year's revenue growth at 3.7%, which is lower than the company's guidance, suggesting that there may be room for upside surprise.

Key Catalysts and Risks

The company's growth prospects are tied to its ability to drive innovation in diagnostics, expand its consumer testing business, and navigate the changing reimbursement landscape. The delay in PAMA rate cuts provides short-term relief, but the company is working to pass the RESULTS Act into law to address the structural flaws in PAMA. The competitive environment is expected to be strong, with share gains in organic growth.

3. NewsRoom

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Quest Diagnostics Elects Timothy Wentworth, Former CEO of Walgreens Boots Alliance, Evernorth Health Services and Express Scripts, to Board of Directors

Mar -12

Source: prnewswire.com

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Quest Diagnostics Incorporated (DGX) Presents at Leerink Global Healthcare Conference 2026 Transcript

Mar -11

Source: seekingalpha.com

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Should You Continue to Hold DGX Stock in Your Portfolio?

Mar -10

Source:

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Cresset Asset Management LLC Has $1.36 Million Holdings in Quest Diagnostics Incorporated $DGX

Mar -10

Source: defenseworld.net

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Quest Diagnostics Incorporated $DGX Shares Purchased by Blair William & Co. IL

Mar -09

Source: defenseworld.net

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Quest Diagnostics Introduces AI Companion to Help Patients Understand and Act on Lab Test Results

Mar -02

Source: prnewswire.com

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Digi Power X Graduates to Cboe Canada

Feb -27

Source: businesswire.com

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Quest Diagnostics Incorporated (NYSE:DGX) Receives Average Recommendation of “Moderate Buy” from Brokerages

Feb -27

Source: defenseworld.net

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (3.00%)

6. Segments

Diagnostic Information Services

Expected Growth: 3%

Quest Diagnostics' Diagnostic Information Services segment growth is driven by increasing demand for healthcare analytics, expansion of healthcare IT infrastructure, and growing adoption of value-based care models. Additionally, the company's strategic acquisitions, investments in digital health, and strong relationships with healthcare providers contribute to its growth.

All Other

Expected Growth: 3%

Quest Diagnostics' 'All Other' segment growth is driven by increasing demand for non-core diagnostic services, expansion into new markets, and strategic acquisitions. Additionally, the company's focus on innovation, such as its Quanum suite of healthcare information technologies, contributes to growth. Furthermore, the company's efforts to improve operational efficiency and reduce costs also support growth.

7. Detailed Products

Clinical Testing

Quest Diagnostics offers a comprehensive range of clinical testing services, including routine and esoteric tests, to help diagnose and monitor various medical conditions.

Molecular Diagnostics

Quest Diagnostics' molecular diagnostics services utilize advanced genetic testing technologies to identify genetic mutations and variations associated with diseases.

Anatomic Pathology

Quest Diagnostics' anatomic pathology services provide diagnostic insights through the examination of tissue samples, helping physicians diagnose and treat diseases.

GeneSight

GeneSight is a genetic test that helps physicians personalize medication treatment plans for patients based on their genetic profile.

Quanum

Quanum is a healthcare analytics platform that provides insights and data analytics to help healthcare providers improve patient care and reduce costs.

Care360

Care360 is a healthcare IT platform that provides electronic health record (EHR) services, practice management, and revenue cycle management solutions.

8. Quest Diagnostics Incorporated's Porter Forces

Forces Ranking

Threat Of Substitutes

Quest Diagnostics Incorporated faces moderate threat from substitutes, as patients have limited alternatives for certain medical tests and services. However, the company's strong brand reputation and wide network of laboratories help mitigate this threat.

Bargaining Power Of Customers

Quest Diagnostics Incorporated has a large customer base, including healthcare providers, patients, and insurance companies. However, the bargaining power of customers is relatively low due to the company's dominant market position and the lack of alternative providers.

Bargaining Power Of Suppliers

Quest Diagnostics Incorporated has a diverse supplier base, and the bargaining power of suppliers is relatively low. The company's large scale of operations and strong relationships with suppliers help mitigate the risk of supplier concentration.

Threat Of New Entrants

The threat of new entrants in the medical testing and diagnostic services industry is relatively low due to high barriers to entry, including significant capital requirements, regulatory hurdles, and the need for specialized expertise.

Intensity Of Rivalry

The medical testing and diagnostic services industry is highly competitive, with several established players competing for market share. Quest Diagnostics Incorporated faces intense rivalry from competitors such as Laboratory Corporation of America Holdings and Sonic Healthcare Limited.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 43.55%
Debt Cost 3.95%
Equity Weight 56.45%
Equity Cost 8.30%
WACC 6.40%
Leverage 77.15%

11. Quality Control: Quest Diagnostics Incorporated passed 3 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Quest Diagnostics

A-Score: 6.1/10

Value: 4.9

Growth: 4.6

Quality: 5.6

Yield: 4.0

Momentum: 8.0

Volatility: 9.3

1-Year Total Return ->

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Stock-Card
LabCorp

A-Score: 5.4/10

Value: 4.6

Growth: 4.3

Quality: 5.4

Yield: 2.0

Momentum: 7.0

Volatility: 9.3

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Stock-Card
Medpace

A-Score: 5.0/10

Value: 1.3

Growth: 9.3

Quality: 7.9

Yield: 0.0

Momentum: 9.5

Volatility: 2.0

1-Year Total Return ->

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Stock-Card
Natera

A-Score: 4.7/10

Value: 4.0

Growth: 7.0

Quality: 3.6

Yield: 0.0

Momentum: 8.5

Volatility: 5.0

1-Year Total Return ->

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Stock-Card
Waters

A-Score: 4.4/10

Value: 1.0

Growth: 5.2

Quality: 7.7

Yield: 0.0

Momentum: 6.0

Volatility: 6.3

1-Year Total Return ->

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Stock-Card
Charles River Laboratories

A-Score: 3.3/10

Value: 4.6

Growth: 4.1

Quality: 3.1

Yield: 0.0

Momentum: 3.5

Volatility: 4.3

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

200.87$

Current Price

200.87$

Potential

-0.00%

Expected Cash-Flows