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Valued at a market cap of $20.5 billion, Quest Diagnostics Incorporated (DGX) is a clinical laboratory company that provides diagnostic testing, information, and services to physicians, hospitals, employers, and health plans. The Secaucus, New Jersey-based company operates an extensive network of laboratories, patient service centers, and mobile phlebotomy services.
Companies valued at $10 billion or more are typically classified as “large-cap stocks,” and DGX fits the label perfectly, with its market cap exceeding this threshold, underscoring its size, influence, and dominance within the diagnostics & research industry. The company’s specialty is transforming diagnostic insights into actionable care, utilizing technologies such as digital pathology, bioinformatics, and data analytics to enable doctors to select the most appropriate tests, optimize laboratory operations, and enhance health outcomes.
This healthcare company is currently trading 1.1% below its 52-week high of $185.62, reached on Aug. 22. Shares of DGX have gained 2.1% over the past three months, underperforming the Dow Jones Industrial Average’s ($DOWI) 9.8% return during the same time frame.
Nonetheless, in the longer term, DGX has surged 18.4% over the past 52 weeks, outpacing DOWI's 10.2% uptick over the same time period. Moreover, on a YTD basis, shares of DGX are up 21.7%, compared to DOWI’s 8.9% rise.
To confirm its bullish trend, DGX has been trading above its 200-day moving average over the past year, and has remained above its 50-day moving average since early August.
On Jul. 22, shares of DGX soared 7.1% after its better-than-expected Q2 earnings release. The company’s net revenue grew by a robust 15.2% year-over-year to $2.8 billion, surpassing consensus estimates by 1.5%. Moreover, its adjusted EPS came in at $2.62, up 11.5% from the year-ago quarter and 1.9% ahead of analyst expectations. Additionally, DGX raised its fiscal 2025 guidance, now expecting revenue to be between $10.8 billion and $10.9 billion, and adjusted earnings in the range of $9.63 to $9.83 per share. This upbeat outlook underscored management’s confidence in sustaining the momentum, further bolstering investor sentiment.
DGX has underperformed its rival, Labcorp Holdings Inc.’s (LH) 23.5% surge over the past 52 weeks. However, it has outpaced LH’s 20.9% rise on a YTD basis.
Despite DGX’s recent underperformance, analysts remain moderately optimistic about its prospects. The stock has a consensus rating of "Moderate Buy” from the 18 analysts covering it, and the mean price target of $188.71 suggests a 2.8% premium to its current price levels.
