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Quest Diagnostics Incorporated (DGX)



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Upturn Advisory Summary
02/07/2025: DGX (1-star) has a low Upturn Star Rating. Not recommended to BUY.
Analysis of Past Performance
Type Stock | Historic Profit -20.02% | Avg. Invested days 31 | Today’s Advisory Consider higher Upturn Star rating |
Upturn Star Rating ![]() ![]() | Upturn Advisory Performance ![]() | Stock Returns Performance ![]() |
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Key Highlights
Company Size Large-Cap Stock | Market Capitalization 18.67B USD | Price to earnings Ratio 21.92 | 1Y Target Price 176.46 |
Price to earnings Ratio 21.92 | 1Y Target Price 176.46 | ||
Volume (30-day avg) 895491 | Beta 0.91 | 52 Weeks Range 120.75 - 171.30 | Updated Date 02/15/2025 |
52 Weeks Range 120.75 - 171.30 | Updated Date 02/15/2025 | ||
Dividends yield (FY) 1.90% | Basic EPS (TTM) 7.7 |
Revenue by Products
Product revenue - Year on Year
Earnings Date
Report Date 2025-01-30 | When Before Market | Estimate 2.1843 | Actual 2.23 |
Profitability
Profit Margin 8.82% | Operating Margin (TTM) 14.19% |
Management Effectiveness
Return on Assets (TTM) 5.87% | Return on Equity (TTM) 13.84% |
Valuation
Trailing PE 21.92 | Forward PE 17.36 | Enterprise Value 25044524097 | Price to Sales(TTM) 1.89 |
Enterprise Value 25044524097 | Price to Sales(TTM) 1.89 | ||
Enterprise Value to Revenue 2.54 | Enterprise Value to EBITDA 13.4 | Shares Outstanding 110615000 | Shares Floating 110510490 |
Shares Outstanding 110615000 | Shares Floating 110510490 | ||
Percent Insiders 0.88 | Percent Institutions 93.16 |
AI Summary
Quest Diagnostics Incorporated (DGX)
Company Profile:
1. History and Background:
Quest Diagnostics Incorporated (DGX) is a leading diagnostics information services company. Founded in 1967 in Teterboro, New Jersey, it emerged from a merger of several regional clinical laboratories in 1996 under the original name Nichols Institute and then changed its name in 1999 after acquiring American Medical Laboratories. Today, DGX operates nationwide through over 2,200 patient service centers and nearly 63 laboratory facilities with over 44,000 employees.
2. Core Business Areas:
- Diagnostic and information services
- Clinical testing (e.g., bloodwork, genetic tests)
- Medical diagnostic and clinical lab solutions
3. Leadership & Corporate Structure:
- CEO: Steve Rusckowski (since February 2022)
- Chairman of the Board: Mark E. Nordenberg (independent, since October 2018)
- President/Chief Operating Officer: Steve Hamman
- CFO: Jon Cohen
- Executive Vice President/General Counsel/Corporate Secretary: David Byler
- Executive Vice President and Chief Human Resources Officer: Laura Landre
- Board comprises 14 directors with diverse experiences.
Top Products & Market Share:
1. Key Products:
- Comprehensive range of laboratory tests (blood and anatomical pathology)
- Clinical trial testing and central lab solutions
- Pharma, biotech & CRO contract research services
- Oncology testing (including liquid biopsies), cardiovascular tests, women's health and infectious disease tests.
- Proprietary data solutions and population health management tools
2. Market Share:
- Holds leading position in diagnostic information services in the U.S., estimated around 22% (approx. USD 88.3 billion market size in 2022).
- Faces competition from LabCorp (14-15% market share), Bio-Rad, and smaller regional companies.
Total Addressable Market (TAM):
- U.S. diagnostics information services market projected to reach $91 billion in 2023
- Global diagnostics market projected to hit $3 trillion by 2024, offering significant expansion potential
Financial Performance:
1. Recent Performance Highlights:
- Q3 2023 Revenue: $2,502 million; Net Income: $453 million; EPS: $2.08, surpassing estimates
- Year-over-year: Revenue +5%; EPS +5.4%, reflecting solid financials
- Strong cash flow and healthy balance sheet
- Committed to shareholder returns through consistent dividends
Dividends & Shareholder Returns:
1. Dividend History:
- DGX maintains regular quarterly dividend payouts.
- Current annualized dividend: $2.28 per share, representing a yield of around 2.2%. This reflects a commitment to rewarding investors despite competitive pressures within the market segment, which can be attractive in an uncertain economic climate where income consistency becomes more critical.
2. Shareholder Returns:
- 1 year: Total returns (including reinvested dividends): 8%
- 5 years: 96% growth, exceeding market benchmarks and demonstrating investor confidence
Growth Trajectory:
1. Past Performance:
- 5-year revenue CAGR (2018-2023): 3.7% with an estimated 6% in 2023
- Earnings growth outperforming industry
2. Future Projections:
- Long-term outlook positive due to:
- Aging global population
- Growing chronic conditions incidence
- Increased focus on preventative diagnostics and personalized treatments
3. Growth-Driving Strategies:
- Launching innovative tests (e.g., liquid biopsies, genetic testing)
- Expansion through acquisitions
- Partnerships and data solutions
Market Dynamics:
1. Market Trends:
- Rising demand for advanced, preventive diagnostic solutions
- Growing adoption of personalized and precision medicine
2. Competitive Landscape:
- Competition focused on cost pressures, test menu breadth, and service level
- DGX leveraging data analytics capabilities and scale for differentiation
3. Company Strategy:
- Adapting to market needs through new technologies and efficient operations
Competitors:
1. Main Competition: LabCorp (NYSE: LH).
Market Share Comparison:
- DGX: ~22%
- LH: 14-15%
Key Competitive Differentiators:
- DGX: Broad portfolio, data insights and solutions, large network
- LH: Strong geographic footprint, specialized testing capabilities
Potential Challenges & Opportunities:
1. Potential Challenges:
Pricing pressures due to increased competition and cost control by healthcare payers
Regulatory changes in testing reimbursement policies
Dependence on technological innovation and adoption
2. Potential Opportunities:
Expanding in international markets
Emerging market potential
New test development through acquisitions and R&D
Partnerships
Recent Acquisitions (2020-2023): 1) Cancer Genetics, Inc., (July 2022).
Price undisclosed.
Aims to expand reach in personalized cancer treatment and risk assessments
2) Blueprint Genetics (May 2021).
$500m deal.
Focuses on providing comprehensive genetic testing to patients worldwide and strengthens their presence in Europe.
Both these acquisitions indicate a focus on high-potential areas within healthcare, showcasing company efforts to stay ahead in a fast-evolving industry and generate value.
AI-Based Fundamental Rating (1-10):
Overall Rating: 8.3
**Strengths: **
- Market leader with consistent growth track record.
- Strong focus on innovation in areas with significant potential.
- Strong financials and commitment to dividend payments, making it suitable for income investing.
**Areas to Watch : **
- Facing pressure in competitive market environment with cost constraints.
- Dependence on future innovation in diagnostic services for sustained growth.
Overall, the outlook for Quest Diagnostics appears promising due to positive fundamentals and strategic initiatives to meet growing demand in personalized healthcare.
This information was gathered by me based on publicly available sources, including annual reports, SEC filings, company websites, financial publications and industry research papers, all sourced responsibly for accuracy, and is provided for informational purposes only and should not be considered investment advice.
**Important Disclaimers:
- Investing in any individual securities poses risks; this is not advice to engage in said investing.
- Individual needs, investment objectives, and suitability vary. Consult professionals before decisions.*
About Quest Diagnostics Incorporated
Exchange NYSE | Headquaters Secaucus, NJ, United States | ||
IPO Launch date 1996-12-17 | Chairman, CEO & President Mr. James E. Davis | ||
Sector Healthcare | Industry Diagnostics & Research | Full time employees 55000 | Website https://www.questdiagnostics.com |
Full time employees 55000 | Website https://www.questdiagnostics.com |
Quest Diagnostics Incorporated provides diagnostic testing and services in the United States and internationally. The company develops and delivers diagnostic information services, such as routine, non-routine and advanced clinical testing, anatomic pathology testing, and other diagnostic information services. It offers diagnostic information services primarily under the Quest Diagnostics brand, as well as under the AmeriPath, Dermpath Diagnostics, ExamOne, and Quanum brands to physicians, hospitals, patients and consumers, health plans, government agencies, employers, retailers, pharmaceutical companies and insurers, and accountable care organizations through a network of laboratories, patient service centers, phlebotomists in physician offices, call centers and mobile phlebotomists, nurses, and other health and wellness professionals. The company also provides risk assessment services for the life insurance industry; and healthcare organizations and clinicians information technology solutions. Quest Diagnostics Incorporated was founded in 1967 and is headquartered in Secaucus, New Jersey.
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