Valued at a market cap of $17.1 billion, Quest Diagnostics Incorporated (DGX) is a leading provider of diagnostic testing and services in the United States and internationally. Based in Secaucus, New Jersey, the company delivers routine, advanced clinical, and anatomic pathology testing under brands such as Quest Diagnostics, AmeriPath, and Dermpath Diagnostics.
Companies valued at $10 billion or more are generally considered "large-cap" stocks, and Quest Diagnostics fits this criterion perfectly. Focused on accelerating growth and operational excellence, Quest employs strategic approaches like disease-focused esoteric testing, hospital partnerships, and enterprise IT enhancements. It supports physicians, hospitals, insurers, and patients through its extensive network of laboratories, patient service centers, and mobile phlebotomy services.
Shares of the diagnostics and research giant are trading 7.9% below its 52-week high of $165.32, recorded in November. The company has declined 1.2% over the past three months, lagging behind the broader Global X Telemedicine & Digital Health ETF's (EDOC) 3.2% return over the same time frame.
However, in the longer term, DGX stock is up 10.4% on a YTD basis, outperforming EDOC's marginal dip. Moreover, shares of DGX have risen 11.3% over the past 52 weeks, compared to EDOC's slight drop over the same time frame.
To confirm its bullish trend, DGX has been trading above its 200-day moving average since late April.
On Oct. 22, Quest Diagnostics shares surged 6.9% after the release of its Q3 results, which exceeded analysts' expectations. The company reported an adjusted EPS of $2.30, surpassing the consensus estimate, and revenue of $2.5 billion, an 8.4% increase year-over-year. This performance was driven by strong demand for diagnostic tests, as patients resumed medical procedures previously delayed during the pandemic. Additionally, the recent acquisition of LifeLabs contributed to the positive results, enhancing the company's service offerings and market reach. The company also raised its full-year revenue outlook to $9.8 billion - $9.9 billion, reflecting positive growth expectations despite challenges like Hurricane Milton.
DGX's outperformance becomes more evident when compared to its rival, Labcorp Holdings Inc. (LH), which gained 1.8% over the past 52 weeks and a marginal rise on a YTD basis.
Despite DGX outpacing its industry peers, analysts remain cautiously optimistic about its prospects. The stock has a consensus rating of "Moderate Buy" from 16 analysts in coverage, and the mean price target of $174.19 suggests a 14.6% premium to its current levels.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.