A month has gone by since the last earnings report for Quest Diagnostics (DGX) . Shares have added about 2.7% in that time frame, outperforming the S&P 500.Will the recent positive trend continue leading up to its next earnings release, or is Quest Diagnostics due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers. Quest Diagnostics Tops Q3 Earnings and Rev ...

Quest Diagnostics (DGX) appears an attractive pick, as it has been recently upgraded to a Zacks Rank #2 (Buy). An upward trend in earnings estimates -- one of the most powerful forces impacting stock prices -- has triggered this rating change.The sole determinant of the Zacks rating is a company's changing earnings picture. The Zacks Consensus Estimate -- the consensus of EPS estimates from the sell-side analysts covering the stock -- for the current and following years is tracked by the system.The power of ...

Core Business and Growth Drivers - Quest Diagnostics' Advanced Diagnostics portfolio is driving growth, particularly in brain health with AD-Detect blood-based Alzheimer's disease testing and in women's health with prenatal and hereditary genetic testing [3] - The company is seeing robust demand for testing in genital tract infections, including several STIs [3] - In the cardio-metabolic health space, there is growing interest in biomarkers for early detection of cardiovascular and metabolic diseases, and the acquisition of Haystack Oncology has positioned the company in the high-growth area of ctDNA solid-tumor MRD testing [4] - Physician Lab Services experienced strong growth in Q3 2024 due to new customer wins, expanded business from Advanced Diagnostics utilization, and acquisitions [5] - Hospital Lab Services is growing above historical levels, supported by strong demand for reference testing [6] - The questhealthcom platform reported 40% growth in total revenues, driven by consumer-initiated testing and demand for expanded access to basic healthcare [6] Financial Performance and Market Position - Quest Diagnostics has a market capitalization of $1788 million and an earnings yield of 555%, outperforming the industry's yield of 345% [2] - The company's earnings surpassed estimates in the trailing four quarters, with an average surprise of 492% [2] - The Zacks Consensus Estimate for 2024 EPS is $889, with revenue expected to grow 58% to $979 billion [11] - The stock has increased 208% over the past year, compared to the industry's 294% growth and the S&P 500's 337% growth [1] Operational Excellence and Cost Management - Quest Diagnostics is strategically deploying automation and AI to improve quality, service, efficiency, and workforce experience [7] - The company's Invigorate program has consistently delivered 3% annual cost savings and productivity enhancements, helping to mitigate inflationary pressures [7] - The company completed the build-out of full end-to-end automation for core routine tests at its Lenexa, KS laboratory, making it the third fully automated lab in its national network [8] - Quest Diagnostics is piloting automated specimen accessioning in its Clifton lab to increase productivity and improve quality [8] Challenges and Risks - The company's long-term debt stood at $565 billion at the end of Q3 2024, with cash and cash equivalents at only $764 million [9] - COVID-19 testing revenues have declined significantly, with a nearly 85% drop last year and an expected $175 million decline in 2024, partially offsetting base business growth [10] Industry Comparison - Haemonetics (HAE) has an earnings yield of 502%, surpassing the industry's 118%, and its shares have risen 203% against the industry's 73% decline over the past year [12] - Boston Scientific (BSX) has a long-term estimated earnings growth rate of 138%, with shares rallying 643% compared to the industry's 265% gain [13] - Penumbra (PEN) has an estimated earnings growth rate of 335% for 2024, compared to the industry's 159%, with shares rising 99% against the industry's 234% growth [14]

Quest Diagnostics Inc.’s (DGX) third-quarter revenue growth can be attributed to the strong momentum in its expanding portfolio of Advanced Services. The company strategically deploys AI and automation to improve its operational quality and efficiency. Its base business volume remains robust, which is highly encouraging. However, the mounting debt burden on DGX’s balance sheet could pose challenges for its operations.In the past year, this Zacks Rank #2 (Buy) company’s shares have risen 12.7% compared with ...

Quest Diagnostics (NYSE: DGX ) is a provider of medical diagnostic services to markets across the world. Operations are focused on North America, where DGX has more than 2,000 locations. DGX has extensive coverage over the USBuildingBenjamins is a free stock picking and market commentary investment newsletter. Building Benjamins is the DBA (doing businesses as) publishing entity for Tradition Investment Management, LLC, a registered investment adviser. Benjamin Halliburton, our founder, also founded Traditi ...

Thank you for reading my research on Seeking Alpha. If you want to learn even more about my method and how I discover these investment opportunities, please check out my subscription marketplace service, Compounding Healthcare , and sign up for a free trial.In my previous Quest Diagnostics (NYSE: DGX ) article , I analyzed the company’s Q2 2024 earnings report, which produced a beat on EPS and revenue. The company did report that their base business revenue grew almostHe is the leader of the investing group ...

Revenue Performance - Net revenues for Q3 2024 increased to $2.488 billion, up from $2.295 billion in Q3 2023[123] - DIS revenues grew to $2.427 billion in Q3 2024, compared to $2.228 billion in Q3 2023[123] - Revenue per requisition increased by 3.3% in Q3 2024, reversing a 7.2% decline in Q3 2023[123] - Requisition volume rose by 5.5% in Q3 2024, compared to a 0.5% decline in Q3 2023[123] - DS revenues decreased to $61 million in Q3 2024 from $67 million in Q3 2023[123] Net Income - Net income attributable to Quest Diagnostics was $226 million in Q3 2024, slightly up from $225 million in Q3 2023[123] Acquisitions - The company completed the acquisition of LifeLabs for approximately USD $1 billion in August 2024[126] - Quest Diagnostics acquired select assets of PathAI Diagnostics for $100 million in June 2024[125] Cost Savings and Productivity - The Invigorate program aims to deliver 3% annual cost savings and productivity improvements[130] Restructuring and Integration Costs - The company incurred $45 million in pre-tax charges for restructuring and integration activities in the first nine months of 2024[131]

Investors looking for stocks in the Medical - Outpatient and Home Healthcare sector might want to consider either Quest Diagnostics (DGX) or The Pennant Group, Inc. (PNTG) . But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.The best way to find great value stocks is to pair a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system. The Zacks Rank is a proven strategy that targets companies with positive ...

Financial Data and Key Metrics Changes - Total revenue for Q3 2024 was $2.49 billion, representing an 8.5% increase year-over-year, with organic revenue growth of 4.2% driven by new customer wins and acquisitions [16][18] - Reported operating income was $330 million, or 13.3% of revenues, compared to $342 million, or 14.9% of revenues last year; adjusted operating income was $385 million, or 15.5% of revenues, compared to $380 million, or 16.6% last year [18] - Reported EPS was $1.99, up from $1.96 a year ago; adjusted EPS was $2.30 versus $2.22 the prior year [18][19] Business Line Data and Key Metrics Changes - Diagnostic information services revenue increased by 9% year-over-year, reflecting strong growth in physician and hospital channels, along with contributions from recent acquisitions [16][18] - Physician lab services experienced high single-digit revenue growth, driven by new customer wins and increased utilization of advanced diagnostics [9] - Consumer-initiated testing revenues grew over 40%, with a repeat customer rate increasing to 30% from less than 10% two years ago [12] Market Data and Key Metrics Changes - Total volume measured by requisitions increased by 5.5% year-over-year, with acquisitions contributing 5% to total volume [17] - The company renewed a national health plan agreement with Elevance Health, extending reach in Virginia, Georgia, Colorado, and Nevada, which previously had limited access [10] Company Strategy and Development Direction - The company’s growth strategy focuses on delivering solutions for core customers, including advanced diagnostics in faster-growing clinical areas such as brain health and molecular genomics [8] - Acquisitions are a key growth driver, with an emphasis on outreach purchases and independent labs; the company is on track to complete eight acquisitions in 2024 [6][24] - Operational improvements are being driven through automation and AI to enhance quality, service, and efficiency [15] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the strong organic growth and the potential for accelerated revenue and earnings growth in 2025, driven by acquisitions and advanced diagnostics [24] - The company anticipates a revenue range of $9.8 billion to $9.85 billion for 2024, with adjusted EPS expected between $8.85 and $8.95 [19][21] - Management noted that the impact of Hurricane Milton is expected to negatively affect revenues by approximately $15 million and EPS by about $0.08 in Q4 [20] Other Important Information - The company completed the acquisition of LifeLabs, which is expected to provide a strong foundation for expansion in Canada, where demographics are more favorable than in the U.S. [6][61] - The company is collaborating with Hologic to include their automated cytology solution, which utilizes AI for cervical cancer screening [15] Q&A Session All Questions and Answers Question: How do you think the organic growth profile of the business will do in 2025? - Management expects organic growth to be approximately 3%, driven by strong utilization and improvements in revenue per requisition [26] Question: Can you talk about the margin impact from LifeLabs and the M&A pipeline? - LifeLabs is expected to have a slight negative impact on margins initially, but profitability is expected to improve over time; the M&A pipeline remains strong with a focus on smaller outreach deals [34][37] Question: Why weren't you in the Elevance and Sentara Health contracts previously? - The company was previously out of network in certain states and is now included due to the commitment from health plans to independent labs that offer quality and competitive pricing [40] Question: Can you confirm the DCP impact in the quarter? - DCP had a negative impact on operating margin in the quarter, with an increase of about $10 million year-over-year [53] Question: Are there specific geographies where you’re seeing market share gains from hospital outreach deals? - The company has gained a strong presence in markets like Minneapolis and Columbus, where previously independent physicians were largely using health system labs [56]

Quest Diagnostics Inc DGX posted third-quarter adjusted earnings per share of $2.30, beating the consensus of $2.26.Sales increased 8.5% year-over-year to $2.49 billion, beating the consensus of $2.42 billion.Quest Diagnostics saw total revenue growth of 8.5%, including 4.2% organic growth, said Quest Diagnostics CEO Jim Davis. “Our performance was driven by new customer wins and expanded business with physicians and hospitals, as well as recent acquisitions, including LifeLabs,” he added. “We are now on tr ...