Quest Diagnostics (DGX) Gains From New M&As Amid Competition

Company Performance - Hims & Hers Health stock has surged 165.9% in the past year, with earnings estimates for 2024 increasing from 18 cents to 19 cents and for 2025 from 33 cents to 35 cents in the past week [1] - HIMS has beaten earnings estimates in three of the last four quarters, with an average surprise of 79.2% and a staggering 150% surprise in the last reported quarter [4] - ResMed's fiscal 2024 earnings per share estimates have remained constant at $7.70, with shares declining 1.6% over the past year compared to the industry's fall of 1.7% [5] - Medpace's 2024 earnings per share estimates have remained constant at $11.29, with shares surging 81.9% in the past year compared to the industry's 5% growth [14] - ResMed has surpassed earnings estimates in three of the last four quarters, with an average surprise of 2.8% [15] Quest Diagnostics Overview - Quest Diagnostics is experiencing robust volume growth driven by increased demand for its services, with base business revenues increasing nearly 6% in the first quarter of 2024 [6] - The company has made significant strides in its Professional Lab Services relationships, contributing to its growth [2] - Quest Diagnostics has a strong customer base, with approximately 90% of health plan members in the U.S. having access to its laboratory services [7] - The company is benefiting from a broad health plan access and strong ties with health plans, resulting in significant revenue increases compared to the previous year [6] Competitive Landscape - Quest Diagnostics faces intense competition from LabCorp, other commercial laboratories, and hospitals, with service quality being a key competitive factor [8] - The company is poised to deliver accessible and affordable laboratory testing, helping health systems improve productivity and patient care [2] - Despite strong growth, Quest Diagnostics is challenged by declining testing revenues, particularly due to a rapid transition away from COVID-19 testing, which saw a nearly 85% revenue drop in 2023 [12][11] M&A and Growth Opportunities - Quest Diagnostics has a promising M&A pipeline, with recent acquisitions contributing to its growth [2] - The company is well-positioned to capitalize on sustained high healthcare utilization rates and continue driving new customer growth [6]