Quest Diagnostics Stock Climbs 27.3% in a Year: What's Fueling It?

Core Insights - Quest Diagnostics (DGX) has experienced a significant share price increase of 27.3% over the past year, outperforming the industry and S&P 500 [1][8] - The company is currently rated Zacks Rank 2 (Buy) and is benefiting from investments in Advanced Diagnostics, which enhance patient care and drive growth [2] Company Overview - Headquartered in Secaucus, NJ, Quest Diagnostics provides a wide range of diagnostic information services and serves as a key provider of reference testing for about half of U.S. hospitals [3] - The company aims for annual revenue growth of 1-2% through targeted acquisitions [3] Growth Catalysts - The growth of Quest Diagnostics is primarily driven by its strength in Advanced Diagnostics, particularly in areas such as cardiometabolic, autoimmune, brain health, oncology, and women's health [4] - There is robust demand for Alzheimer's disease risk detection blood tests, and the company plans to introduce new biomarkers for better assessment of dementia [4] - The company has expanded its women's health offerings with a new self-collection option for HPV cervical cancer screening [4] - Quest Diagnostics anticipates revenue generation from its Haystack minimal-residual disease (MRD) test this year [4] Acquisitions and Partnerships - In 2024, the company completed eight acquisitions, including LifeLabs in Canada and Allina Health, to maximize productivity [5] - New health plan partnerships with Elevance Health and Sentara Health Plans are expected to drive volume and revenue gains [6] - Quest Diagnostics became the first independent national lab selected for the Optum Health preferred lab network, gaining access to over 85,000 physicians [6] Operational Efficiency - The company targets 3% annual cost savings and productivity improvements through its Invigorate cost-savings program [9] Financial Estimates - The Zacks Consensus Estimate for Quest Diagnostics' 2025 and 2026 earnings per share (EPS) is projected to increase by 8.6% and 8.2%, reaching $9.70 and $10.50 respectively [11] - Revenues for 2025 are expected to grow by 9.2% to $10.78 billion, followed by a 3.7% increase to $11.19 billion in 2026 [11]