About Labcorp Labcorp (NYSE: LH) is a global leader of innovative and comprehensive laboratory services that helps doctors, hospitals, pharmaceutical companies, researchers and patients make clear and confident decisions. We provide insights and advance science to improve health and improve lives through our unparalleled diagnostics and drug development laboratory capabilities. The company's nearly 70,000 employees serve clients in approximately 100 countries, provided support for more than 75% of the new d ...

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Labcorp Holdings Inc. (LH) , or Labcorp, is prioritizing key specialty testing areas, such as oncology, women’s health, autoimmune disease and neurology, aiming to tap into strong growth opportunities.  The company maintains a solid pipeline of potential acquisitions that fits its financial strategy and will enhance its organic growth. Strong financial stability also bodes well for the stock. Meanwhile, macroeconomic volatilities and adverse currency fluctuations may dent its growth.In the past year, this Z ...

Revenue and Growth - For the year ended December 31, 2024, the Company's revenues were $13,008.9 million, a 7.0% increase from $12,161.6 million in 2023, driven by organic revenue growth of 3.9% and acquisitions contributing 2.8%[304] - The Dx segment revenues increased by 7.7% to $10,144.3 million, with organic revenue growth of 4.1% and acquisitions contributing 3.7%[309] - The BLS segment revenues rose by 5.3% to $2,922.6 million, primarily due to organic growth of 4.3% and favorable foreign currency translation of 1.1%[311] - The Company expects continued growth driven by organic demand and strategic acquisitions, with a focus on enhancing operational efficiency[306] Expenses and Costs - Cost of revenues increased by 6.7% to $9,384.5 million, while the cost of revenues as a percentage of revenues decreased to 72.1% from 72.3%[312] - Selling, general and administrative expenses rose by 10.3% to $2,230.0 million, with SG&A as a percentage of revenues increasing to 17.1% from 16.6%[313] - The Company recorded net restructuring charges of $46.0 million for 2024, a decrease of 6.3% compared to $49.1 million in 2023[316] Income and Cash Flow - Operating income for the Company increased by 49.8% to $1,086.7 million, with segment operating income rising to $2,065.2 million, a 3.9% increase[323] - Net cash provided by continuing operating activities was $1,585.8 million, up from $1,202.3 million in 2023, reflecting higher cash earnings[329] - Cash and cash equivalents at December 31, 2024, totaled $1,518.7 million, compared to $536.8 million in 2023[328] Capital Expenditures and Financing - Capital expenditures for 2024 were $489.9 million, representing 3.8% of revenues, primarily for growth projects in core businesses[331] - Net cash provided by continuing financing activities for 2024 was $779.9 million, a significant improvement from cash used of $1,559.0 million in 2023, driven by $2,000.0 million in new debt securities[332] - The Company issued $2,000.0 million in debt securities, including $650.0 million of 4.35% senior notes due 2030, with net proceeds of approximately $1,983.0 million used for debt repayment and general corporate purposes[333] Shareholder Returns and Debt - The Company authorized a new share repurchase plan for up to $1,000.0 million, with a total authorization of $1,280.4 million remaining as of December 31, 2024[339] - The Company paid $243.1 million in dividends for 2024 and announced a cash dividend of $0.72 per share for Q1 2025, totaling approximately $61.0 million[340] - Total future payments for debt instruments as of December 31, 2024, amounted to $6,373.9 million, with $1,000.4 million due within 12 months[346] Foreign Currency and Risk Management - Approximately 13.7% of the Company's revenues for the year ended December 31, 2024, were denominated in currencies other than the U.S. dollar (USD) compared to 12.9% in 2023[381] - A hypothetical change of 10% in average exchange rates would have impacted income before income taxes for 2024 by approximately $27.4 million[381] - The Company limits foreign currency transaction risk through exchange rate fluctuation provisions in contracts or hedging with foreign currency forward contracts[382] - The Company manages interest rate risk through a mix of fixed and variable rate debt, including the use of interest rate swaps[384] Financial Instruments and Accounting - The Company had 12 open foreign exchange forward contracts with a notional value totaling approximately $302.4 million as of December 31, 2024[382] - The Company is a party to USD to Swiss Franc cross-currency swap agreements with an aggregate notional amount of $1,200.0 million[383] - The Company accounts for business combinations under the acquisition method, recording acquired assets at their estimated fair values as of the acquisition date[365] - The Company assesses goodwill and indefinite-lived intangible assets for impairment at least annually, with the most recent assessment indicating fair values greater than carrying values[373] - Deferred tax assets and liabilities are recognized for future tax consequences, measured using enacted tax rates expected to apply to taxable income[366] - The Company entered into fixed-to-variable interest rate swap agreements for its 2.70% senior notes due 2031 with an aggregate notional value of $500.0 million[386] - The variable interest rates are based on three-month LIBOR, which transitioned to SOFR in 2023, plus 1.0706%[386]

Core Insights - Labcorp has launched Labcorp® Plasma Complete™, a ctDNA-based genomic profiling solution for advanced solid tumors, enabling oncologists to make personalized treatment decisions from a simple blood draw [1][2]. Group 1: Product Features - Labcorp Plasma Complete detects genomic alterations in ctDNA across 521 genes, including single nucleotide variants (SNVs), insertions/deletions (InDels), amplifications, translocations, and microsatellite instability [2]. - The test provides a reportable range with a variant allele frequency as low as 0.1% and a specificity greater than 99.99%, allowing for precise detection of tumor-specific biomarkers [4]. Group 2: Clinical Application - The solution is designed to guide targeted treatment decisions, especially when tissue-based testing is not feasible, thus expanding Labcorp's oncology portfolio [2][3]. - Labcorp Plasma Complete is validated in a CAP-accredited and CLIA-certified laboratory, ensuring clinical accuracy and reliability [4]. Group 3: Support for Oncologists - The test simplifies the interpretation of complex genomic data through clear and comprehensive clinical reports, reducing the burden on oncologists [3]. - Integration with Labcorp's broad cancer diagnostic portfolio aids in guiding treatment decisions across all stages of cancer care [3]. Group 4: Research and Development - Labcorp Plasma Complete remains available for biopharmaceutical research, in addition to its clinical applications [4]. - The company has supported over 75% of new drugs and therapeutic products approved by the FDA in 2024, showcasing its significant role in drug development [5].

Core Insights - The article does not provide specific insights into any companies or industries, focusing instead on the author's personal disclosures and lack of investment positions [1][2] Group 1 - The author has no stock, option, or similar derivative positions in any of the companies mentioned [1] - There are no plans to initiate any such positions within the next 72 hours [1] - The article expresses the author's own opinions and is not influenced by compensation from any company [1] Group 2 - Seeking Alpha clarifies that past performance is not a guarantee of future results [2] - No specific investment recommendations or advice are provided for individual investors [2] - The views expressed may not reflect those of Seeking Alpha as a whole [2]

Core Viewpoint - The article emphasizes the importance of value investing and highlights Labcorp (LH) as a strong value stock based on various financial metrics [2][8]. Group 1: Value Investing Strategy - Value investing aims to identify companies undervalued by the market using fundamental analysis and traditional valuation metrics [2]. - The Zacks Rank system and Style Scores are tools that help investors find high-quality value stocks [3]. Group 2: Labcorp's Financial Metrics - Labcorp (LH) has a Zacks Rank of 2 (Buy) and an A for Value, indicating strong potential [4]. - LH's P/E ratio is 15.27, compared to the industry average of 17.28, suggesting it is undervalued [4]. - The Forward P/E for LH has ranged from 12.57 to 15.79 over the past 52 weeks, with a median of 14.37 [4]. - LH's PEG ratio is 1.81, lower than the industry average of 1.93, indicating favorable growth expectations [5]. - The P/B ratio for LH is 2.56, significantly lower than the industry average of 4.62, suggesting solid valuation [6]. - LH's P/CF ratio is 14.87, compared to the industry average of 19.07, highlighting its attractive cash flow outlook [7]. - Overall, these metrics indicate that Labcorp is likely undervalued and presents a strong investment opportunity [8].

Core Insights - Zacks Premium offers tools for investors to enhance their stock market engagement and confidence [1] - The Zacks Style Scores are designed to complement the Zacks Rank, aiding in stock selection based on value, growth, and momentum [2] Zacks Style Scores Overview - Stocks are rated from A to F based on value, growth, and momentum, with A indicating the highest potential for outperformance [3] - The Value Score focuses on identifying undervalued stocks using financial ratios like P/E and Price/Sales [4] - The Growth Score assesses a company's financial health and future growth potential through earnings and sales projections [5] - The Momentum Score identifies optimal entry points based on price trends and earnings estimate changes [6] Zacks Rank and Performance - The Zacks Rank utilizes earnings estimate revisions to guide investors in stock selection [7] - Stocks rated 1 (Strong Buy) have historically achieved an average annual return of +25.41% since 1988, significantly outperforming the S&P 500 [8] - The combination of Zacks Rank and Style Scores helps investors narrow down their choices among over 800 top-rated stocks [9] Stock Recommendation: Labcorp - Labcorp Holdings, Inc. is a leading healthcare diagnostics company with a Zacks Rank of 2 (Buy) and a VGM Score of A [12][13] - The company is projected to have a year-over-year earnings growth of 9.7% for the current fiscal year, supported by positive earnings estimate revisions [13] - Labcorp's strong Zacks Rank and favorable Growth and VGM Style Scores make it a recommended stock for investors [14]

Financial Data and Key Metrics Changes - Revenue for Q4 2024 was $3.3 billion, an increase of 10% compared to Q4 2023, with diagnostics and biopharma revenue each growing by approximately 10% [13][28] - Adjusted EPS for the quarter was $3.45, up 5% year-over-year [14][31] - Free cash flow from continuing operations was $665 million for the quarter [32] Business Line Data and Key Metrics Changes - Diagnostics revenue for the quarter was $2.6 billion, an increase of 10.2% compared to last year, driven by organic growth of 5.1% and net acquisitions of 5.2% [36] - Biopharma Laboratory Services revenue for the quarter was $767 million, an increase of 10.4% compared to last year, with organic revenue growth of 8.9% [39] Market Data and Key Metrics Changes - The company expects enterprise revenue growth of 6.7% to 8% for 2025, with diagnostics revenue projected to grow by 6.5% to 7.7% [15][43] - Biopharma revenue is expected to grow by 3% to 5% compared to 2024 [44] Company Strategy and Development Direction - The company advanced its leadership position through 10 acquisitions in 2024, focusing on high-growth markets such as oncology, women's health, neurology, and autoimmune disease [9][10] - The company aims to support health systems and expand access to diagnostic solutions while continuing to innovate in science and technology [18][22] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in margin expansion for both diagnostics and biopharma, despite initial dilution from the Invitae acquisition [52][127] - The company anticipates a strong growth profile, with adjusted EPS growth expected in the range of 10% for 2025 [15][68] Other Important Information - The company has a robust pipeline of potential acquisition opportunities and plans to utilize free cash flow for acquisitions, share repurchases, and dividends [34][65] - The company ended 2024 with $1.5 billion in cash and total debt of $6.3 billion, with a debt leverage ratio of 2.2 times [35] Q&A Session Summary Question: Can you give us a sense of what underlying margins are in terms of embedded into guidance? - Management indicated that diagnostics margins were impacted by Invitae, weather, and days, but they expect margin expansion in 2025 due to anticipated growth and operational improvements [51][52] Question: How do you see the environment going forward for diagnostics? - Management expects a balanced growth profile for diagnostics, with half of the growth coming from organic sources and the other half from acquisitions [57][122] Question: Can you provide an update on your acquisition pipeline? - Management expressed confidence in a strong acquisition pipeline, emphasizing a balanced approach to capital allocation, including dividends and share repurchases [60][62] Question: How is the integration of Invitae progressing? - Management reported that the integration is going well, with expectations for revenue growth of more than 10% and slight accretion in the second half of 2025 [72][73] Question: What are the expectations for organic growth in diagnostics? - Management highlighted that esoteric testing in specific areas is growing at three times the typical rate, contributing to overall organic growth expectations [78][80]

Core Insights - Laboratory Corp reported fourth-quarter 2024 adjusted earnings per share of $3.45, an increase from $3.30 a year ago, surpassing the consensus estimate of $3.39 [1] - Sales rose 9.8% year-over-year to $3.33 billion, nearly matching the consensus of $3.31 billion, driven by organic revenue growth of 5.4%, acquisitions net of divestitures of 4%, and foreign currency translation of 0.3% [1] - Adjusted operating income for the quarter was $423.2 million, or 12.7% of revenue, compared to $394.9 million, or 13%, in the same quarter last year [2] Company Performance - The company experienced exceptional results in 2024, attributed to both organic and inorganic growth, with a focus on high-growth areas such as oncology, women's health, neurology, and autoimmune disease [2] - The diagnostics segment is benefiting from favorable macro tailwinds, while the Biopharma Laboratory Services segment is seeing solid growth in central labs [3] Future Guidance - LabCorp expects adjusted EPS for 2025 to be between $15.60 and $16.40, compared to the consensus of $16.0, and anticipates sales of $13.9 billion to $14.1 billion against a consensus of $13.8 billion [4] - The guidance includes expected sales growth of 6.5% to 7.7% for Diagnostics Laboratories and 3.0% to 5.0% for Biopharma Laboratory Services in 2025 [4] Market Reaction - Laboratory Corp's stock was down 0.92% at $247.68 during the last check on Thursday [4]