What's Driving Quest Diagnostics Stock's 25.6% Rally in a Year?

Core Viewpoint - Quest Diagnostics (DGX) has experienced a significant share price increase of 25.6% over the past year, outperforming both the industry and the S&P 500 [1] Company Overview - Quest Diagnostics, based in Secaucus, NJ, provides a wide range of diagnostic information services to patients, clinicians, and healthcare organizations, serving approximately half of U.S. hospitals [2] - The company’s growth strategy includes strategic acquisitions and continuous quality improvement [2] Growth Factors - The share price rally is attributed to strong momentum in advanced diagnostics, particularly in areas such as advanced cardiometabolic, autoimmune, brain health, oncology, and women's and reproductive health, all showing double-digit growth in Q1 2025 [3] - Demand for AD-detect blood tests for Alzheimer's disease risk is notably high, with advanced cardiometabolic and autoimmune testing expected to maintain strong growth throughout the year [3] Acquisitions and Strategic Initiatives - In 2024, Quest Diagnostics completed eight acquisitions, including LifeLabs and PathAI Diagnostics, enhancing its market presence and AI adoption for improved diagnostics [4] - The company’s Hospital channel is addressing market challenges faced by hospitals, and enhancements to the QuestHealth.com platform have led to increased first-time orders and the introduction of 10 new tests [5] Operational Improvements - The use of automation and AI is central to Quest Diagnostics' strategy for operational improvements, targeting 3% annual cost savings and productivity enhancements through the Invigorate program [6] - A collaboration with Google Cloud aims to streamline data management and utilize GenAI for personalized experiences [6] Financial Estimates - The Zacks Consensus Estimate projects an 8.6% increase in earnings per share (EPS) for 2025 to $9.70, with revenues expected to grow by 9.2% to $10.78 billion [10]