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Quest Diagnostics Incorporated (DGX) Stock

Quest Diagnostics Incorporated Stock Details, Movements and Public Alerts

Quest Diagnostics (DGX): America's Clinical Testing Giant Powering Precision Medicine's Future

Under CEO James E. Davis's leadership since 2017, Quest Diagnostics has transformed from a traditional blood testing service into a technology-driven diagnostics platform leveraging artificial intelligence, genomics, and digital health integration. The company's 47,000 employees process everything from routine cholesterol panels to cutting-edge oncology companion diagnostics guiding targeted cancer therapies. Strategic acquisitions like Blueprint Genetics expanded capabilities in rare disease testing while partnerships with major health systems create network effects reinforcing market dominance. Recent investments in consumer-initiated testing (MyQuest app) and COVID-era infrastructure modernization position Quest to capture secular growth in preventive healthcare and personalized medicine. Despite competition from LabCorp and threats from retail health disruptors like CVS and Walgreens, Quest's scale advantages, payer relationships, and physician network loyalty create formidable competitive moats supporting consistent profitability and dividend growth.

52-Week Range

$197.55 - $146.30

-6.74% from high · +25.93% from low

Avg Daily Volume

852,230

Latest volume

Fundamentals

Valuation Metrics

P/E Ratio (TTM)

21.06

Near market average

Forward P/E

17.06

Earnings expected to grow

PEG Ratio

1.45

Reasonably valued

Price to Book

2.75

EV/EBITDA

12.17

EPS (TTM)

$8.62

Price to Sales

1.87

Beta

0.62

Less volatile than market

How is DGX valued relative to its earnings and growth?
Quest Diagnostics Incorporated trades at a P/E ratio of 21.06, which is near the market average of approximately 20, suggesting the market views it as fairly valued relative to its earnings. Looking ahead, the forward P/E of 17.06 is lower than the current P/E, indicating analysts expect earnings to grow over the next year. The PEG ratio of 1.45 indicates reasonable value when growth is considered.
What is DGX's risk profile compared to the market?
With a beta of 0.62, Quest Diagnostics Incorporated is less volatile than the overall market. This means when the market moves up or down by 10%, this stock typically moves less than 10% in the same direction. Lower beta stocks are often preferred by conservative investors seeking stability. The price-to-book ratio of 2.75 shows investors value the company above its book value, which often reflects intangible assets or growth prospects.

Performance & Growth

Profit Margin

8.93%

Operating Margin

14.90%

EBITDA

$2.14B

Return on Equity

14.30%

Return on Assets

6.12%

Revenue Growth (YoY)

13.20%

Earnings Growth (YoY)

8.50%

How profitable and efficient is DGX's business model?
Quest Diagnostics Incorporated achieves a profit margin of 8.93%, meaning it retains $8.93 from every $100 in revenue after all expenses. This represents a solid margin typical of well-run businesses, showing the company can effectively balance revenue generation with cost control. The operating margin of 14.90% reveals how efficiently the company runs its core business operations before interest and taxes. With ROE at 14.30% and ROA at 6.12%, the company achieves moderate returns on invested capital.
What are DGX's recent growth trends?
Quest Diagnostics Incorporated's revenue grew by 13.20% year-over-year, showing steady progress in growing the business. This positive trajectory indicates the company maintains competitive positioning in its markets. Earnings increased by 8.50% year-over-year, reflecting the bottom-line impact of business performance. These growth metrics should be evaluated against DIAGNOSTICS & RESEARCH industry averages for proper context.

Dividend Information

Dividend Per Share

$3.15

Dividend Yield

1.75%

Ex-Dividend Date

Jan 13, 2026

Dividend Date

Jan 28, 2026

What dividend income can investors expect from DGX?
Quest Diagnostics Incorporated offers a dividend yield of 1.75%, paying $3.15 per share annually. This modest yield below 2% suggests the company prioritizes growth investments over current income. While the dividend provides some return, investors are likely attracted more by capital appreciation potential than income generation. To receive the next dividend, shares must be purchased before the ex-dividend date of Jan 13, 2026.
How reliable is DGX's dividend for long-term investors?
The dividend sustainability can be assessed through the payout ratio - Quest Diagnostics Incorporated pays $3.15 per share in dividends against earnings of $8.62 per share, resulting in a payout ratio of 36.54%. This balanced payout between 30-60% suggests a sustainable dividend policy that allows both shareholder returns and business reinvestment. The dividend appears well-covered by earnings. The next dividend payment is scheduled for Jan 28, 2026.

Company Size & Market

Market Cap

$20.3B

Revenue (TTM)

$10.85B

Revenue/Share (TTM)

$97.09

Shares Outstanding

111.24M

Book Value/Share

$65.39

Asset Type

Common Stock

What is DGX's market capitalization and position?
Quest Diagnostics Incorporated has a market capitalization of $20.3B, classifying it as a large-cap stock ($10B-$200B). Large-caps are typically industry leaders with established business models, offering a balance of stability and growth potential. They often provide dividend income and are core holdings in institutional portfolios. With 111.24M shares outstanding, the company's ownership is relatively concentrated. As a participant in the DIAGNOSTICS & RESEARCH industry, it competes with other firms in this sector.
How does DGX's price compare to its book value?
Quest Diagnostics Incorporated's book value per share is $65.39, while the current stock price is $184.23, resulting in a price-to-book (P/B) ratio of 2.82. This reasonable premium to book value suggests the market values the company's earnings power and intangible assets appropriately. Most profitable companies trade between 1-3x book value. As a common stock, this represents equity ownership with voting rights.

Analyst Ratings

Analyst Target Price

$197.31

7.10% upside potential

Analyst Recommendations

Strong Buy

1

Buy

7

Hold

10

Sell

0

Strong Sell

0

How reliable are analyst predictions for DGX?
18 analysts cover DGX with 44% recommending buy/strong buy ratings. Analyst predictions have mixed reliability - studies show consensus rarely beats market returns consistently. The mixed views reflect uncertainty about the outlook. The consensus target of $197.31 implies 7.1% upside, but targets are often adjusted to follow price moves rather than predict them.
What is the Wall Street consensus on DGX?
Current analyst recommendations:1 Strong Buy, 7 Buy, 10 Hold, 00The neutral stance suggests uncertainty or fair valuation at current levels.Remember that analyst opinions often lag price movements and can be influenced by investment banking relationships.

Fundamentals last updated: Dec 13, 2025, 08:23 AM

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Quest Diagnostics (DGX) Stock Analysis 2025: Complete Investment Guide

In early 2024, Quest Diagnostics announced integration of advanced AI algorithms across its diagnostic platforms, enabling faster and more accurate detection of subtle disease patterns in routine testing. For James E. Davis, this represented the culmination of a multi-year digital transformation strategy—converting Quest's massive data repository into predictive health insights. With healthcare shifting toward value-based care and early disease detection, Quest's ability to deliver actionable diagnostic information at scale positions the company as essential infrastructure for modern medicine. Investors seeking defensive healthcare exposure with technology-driven growth potential find an attractive combination in this diagnostic leader.

Business Model & Competitive Moat

Quest operates the largest clinical laboratory network in the United States, processing approximately 500 million requisitions annually through 2,200+ patient service centers and partnerships with hospitals, physicians, and employers. The business model generates revenue through fee-for-service testing reimbursed by commercial insurers (50%), Medicare/Medicaid (30%), and patients (20%). Quest's competitive moats include massive scale economies—high-volume testing enables better pricing power with payers and lower per-test costs. The company's Laboratory Information System (LIS) integrates seamlessly with electronic health records (EHRs), creating switching costs for physician practices. Additionally, Quest's CLIA-certified facilities and College of American Pathologists accreditation represent regulatory barriers requiring significant capital and expertise to replicate. Recent focus on esoteric testing (specialized, high-margin diagnostics) diversifies beyond commoditized routine panels, with advanced diagnostics growing at 10%+ annually versus low-single-digit growth in basic testing.

Financial Performance

  • •Revenue: $9.7 billion in 2024, with 4-5% organic growth driven by test volumes and advanced diagnostics
  • •Profitability: Operating margin of 15.8%, improving through automation and shift toward higher-margin esoteric testing
  • •Cash Generation: Free cash flow of $1.4 billion supporting dividends ($2.40/share, 1.8% yield) and share buybacks
  • •Balance Sheet: Net debt of $3.2 billion (2.1x EBITDA), manageable leverage with investment-grade ratings
  • •Returns: ROIC of 13.5%, demonstrating efficient capital deployment despite capital-intensive laboratory infrastructure

Growth Catalysts

  • •Advanced Diagnostics Expansion: Genomic testing, liquid biopsies, and companion diagnostics growing double-digits, now 25% of revenue
  • •Healthcare Consumerization: MyQuest mobile app and retail expansion capturing $4 billion consumer-initiated testing market
  • •Data Monetization: De-identified patient data providing value to pharmaceutical R&D, creating new revenue streams
  • •Medicare Advantage Growth: Increasing MA enrollment driving higher utilization of preventive testing services
  • •Operational Efficiency: Automation and AI reducing labor costs by 15-20%, expanding margins despite reimbursement pressure

Risks & Challenges

  • •Reimbursement Pressure: Medicare and commercial payers continuously cutting testing fees, compressing revenue per test
  • •Retail Disruption: CVS, Walgreens, and Amazon expanding diagnostics capabilities with more convenient access points
  • •Competition: LabCorp maintains near-parity market share, preventing pricing power and creating ongoing margin pressure
  • •Regulatory Risk: FDA oversight of laboratory-developed tests (LDTs) could increase compliance costs and slow innovation
  • •Technology Obsolescence: Rapid advances in at-home testing and point-of-care devices could disintermediate central lab model

Competitive Landscape

Quest and LabCorp form a diagnostic testing duopoly controlling approximately 40% of the U.S. clinical laboratory market. Both companies compete primarily on service quality, turnaround times, and payer relationships rather than price, given similar scale economies. Quest differentiates through superior physician connectivity—deeper integration with EHR systems and broader patient service center footprint in key metropolitan markets. Regional laboratory networks like Sonic Healthcare and ARUP Laboratories compete in specific geographies but lack national scale. Emerging threats include retail giants (CVS Health's HealthHub diagnostic centers), hospital systems bringing testing in-house, and direct-to-consumer startups offering at-home collection. Quest counters through technology investments, strategic hospital partnerships, and leveraging its data assets for insights beyond commodity testing.

MetricQuest DiagnosticsLabCorpRegional Labs
Annual Revenue$9.7B$11.5B$500M-1B
Test Volume500M+600M+10-50M
Operating Margin15.8%13.2%10-12%
Geographic ReachNationalNationalRegional

Who Is This Stock Suitable For?

Perfect For

  • ✓Defensive healthcare investors seeking recession-resistant revenue streams
  • ✓Dividend growth portfolios (18-year dividend increase streak, sustainable payout)
  • ✓Large-cap value investors wanting exposure to healthcare services
  • ✓Long-term holders (5+ years) betting on precision medicine and data analytics growth

Less Suitable For

  • ✗Growth investors seeking high revenue acceleration (mid-single-digit growth typical)
  • ✗High-yield income seekers (1.8% dividend relatively modest)
  • ✗Short-term traders (low volatility, limited catalysts for dramatic price movements)
  • ✗ESG-focused investors concerned about data privacy and patient information usage

Investment Thesis

Quest Diagnostics merits a BUY rating for value-oriented healthcare investors seeking defensive growth and modest income. The stock trades at 17x forward earnings—reasonable for a business delivering mid-single-digit revenue growth with improving margins. James E. Davis's strategic focus on advanced diagnostics and technology integration addresses the commoditization risk inherent in basic testing. The company's recession-resistant characteristics appeal during economic uncertainty, as diagnostic testing remains largely non-discretionary. Free cash flow generation supports a growing dividend (current yield 1.8%) with room for increases given the conservative 35% payout ratio. However, limited revenue growth potential and ongoing reimbursement pressures prevent aggressive valuation multiples. This is a core portfolio holding for healthcare-focused investors rather than a catalyst-driven growth story—expect steady, unexciting returns augmented by dividend income and share repurchases.

Conclusion

Quest Diagnostics belongs in the core healthcare sleeve of diversified portfolios, representing 3-5% allocation for conservative investors. The stock should outperform during market volatility given its defensive characteristics, while technology investments position for modest growth acceleration. Consider accumulating on weakness below $135, maintaining through normal market conditions, and trimming above $165 when valuation exceeds 20x earnings. The combination of stable business fundamentals, dividend growth, and strategic positioning in precision medicine justifies long-term holding despite limited near-term catalysts.
Bull Case
$175 (25% upside)
Base Case
$155 (10% upside)
Bear Case
$125 (10% downside)

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