DGX
Quest Diagnostics Incorporated$208.45
Unclear
Target $212.86
Report: Mar 08, 2026Healthcare • Medical - Diagnostics & Research • Mature CompounderSnapshot
Decision-first overview with recommendation, valuation anchor, and current setup.
Company Overview
Research Snapshot
Price History
Pelican View
Current$208.45+2.1%
Rec: UnclearConviction: Medium
Entry Target
$163.74
(21% below current)
Fair Value
$212.86
(2% above current)
Stop Loss
$157.20
(25% below current)
Position Size
Starter
Time Horizon
Long-Term
Key Metrics
Live Snapshot
Market Data
52 Week High$213.50
52 Week Low$157.20
Avg. 3 Month Volume989K
Efficiency
LTM Gross Margin33.2%
LTM EBITDA Margin19.4%
LTM EBIT Margin14.2%
LTM Operating Margin14.1%
LTM ROA6.2%
LTM ROE13.9%
LTM ROIC16.4%
LTM ROCE11.2%
Capital Structure
Market Cap (MM)$21.5B
Enterprise Value (MM)$27.5B
Shares Outstanding109.87M
Total Debt (MM)$6.38B
Cash & Equivalents (MM)$420.00M
LTM Net Debt (MM)$5.96B
LTM Net Debt/EBITDA2.8x
Growth
TTM Rev. Growth11.8%
Last 3-Yr Rev. CAGR3.7%
Last 3-Yr EBITDA CAGR6.2%
Last 3-Yr EPS CAGR3.1%
Valuation
Street Target Price$215.10
LTM EV/Revenue2.5x
LTM EV/Gross Profit7.5x
LTM EV/EBIT17.5x
LTM EV/EBITDA12.8x
LTM P/E21.7x
LTM EV/FCF20.2x
LTM P/FCF15.8x
LTM P/TB3.8x
LTM P/B3.0x
Dividend Yield1.6%
Payout Ratio36.1%
Executive SummarySituation: Current price is $208.45 versus fair value $212.86 (2.1% expected return), and valuation confidence is stable. Debate: Bull case depends on Corewell Co-Lab Scaling: The joint venture is expected to add $250M in revenue in 2026 at low-single-digit margins, ramping to low-teens by 2027. Bear case centers on Moat Erosion via PAMA: Structural flaws in the Protecting Access to Medicare Act could lead to excessive future rate cuts, directly impairing the company's pricing power and return on capital. Conclusion: Recommendation is Unclear; maintain no position until reliability and catalyst evidence improve.
Bull Case
Quest's advanced diagnostics portfolio and consumer platform are growing at double-digit rates, with consumer testing now exceeding $250M in annual revenue. The Corewell Co-Lab joint venture provides a clear path to $1B in incremental revenue by 2026 with margins expected to expand from low-single digits to low-teens by 2027.
Bear Case
The company faces persistent 3-4% wage inflation that is only partially offset by cost-savings programs, as evidenced by operating margins expanding only 50 basis points despite 11.8% revenue growth. Furthermore, the Protecting Access to Medicare Act (PAMA) remains a structural risk that could lead to significant reimbursement cuts in future years.
Key Catalysts
Mid-Term (6-18 months)Impact: High
Corewell Co-Lab Scaling: The joint venture is expected to add $250M in revenue in 2026 at low-single-digit margins, ramping to low-teens by...
Near-Term (0-6 months)Impact: Moderate
Advanced Diagnostics Expansion: Continued double-digit growth in oncology (Haystack MRD) and Alzheimer's testing (AD-Detect) shifts the reve...
Long-Term (18+ months)Impact: Moderate
Quest is currently at a critical juncture as it absorbs the $0.25 EPS dilution from Project Nova while attempting to prove that its base-bus...
Primary Risks
Concern: High
Moat Erosion via PAMA: Structural flaws in the Protecting Access to Medicare Act could lead to excessive future rate cuts, directly impairin...
Concern: Medium
Wage and Benefit Inflation: Persistent 3-4% labor cost increases could outpace the 3% annual savings from the Invigorate program, leading to...
Concern: Medium
The stewardship verdict is a Status Quo execution plan. The board is highly independent and possesses deep financial and healthcare expertis...
Recent Activity
2026-02-10SEC Filing (8-K)
+7.37%Quest Diagnostics reports Q4 2025 revenue of $2.81B (up 7.1%) and full-year revenue of $11.04B (up 11.8%), with 2026 guidance for EPS between $9.45-$9.65.
2025-07-22SEC Filing (8-K)
+7.08%Quest Diagnostics reports Q2 2025 financial results and raises full year guidance
2025-04-22SEC Filing (8-K)
+6.78%Quest Diagnostics reports Q1 2025 financial results and reaffirms full year guidance
2025-01-30SEC Filing (8-K)
+5.62%Quest Diagnostics reports Q4 2024 revenue of $2.62B (up 14.5%) and full-year revenue of $9.87B (up 6.7%), with guidance for 2025 EPS between $8.34-$8.59.
2024-10-22SEC Filing (8-K)
+6.85%Quest Diagnostics reports Q3 2024 financial results and updates full year guidance
Valuation Table
9.8/10Decision Grade
Scenario Range
$160
Bear
$218
Base
$270
Bull
$208