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Relative valuation derived from Healthcare sector median benchmarks. Model weights: EV/EBITDA (40%), P/B (35%), P/S (25%). Multiples adjusted for extreme outliers and non-recurring volatility.
Auditing capital efficiency...
Quality Profile Audit
Score: 50GRADE C+
Composite assessment of profitability, capital efficiency, and financial strength. Top-tier entities demonstrate sustainable cash flow generation.
Return on Equity
Profit generated per dollar of shareholder equity
14.2%
Sector: -43.5%
Dividend Analysis audit
GROWTH
1.63%
Trailing Yield
$1.63
Per $100 Invested
Modest dividend — capital prioritized for reinvestment.
Est. Payout Ratio
35%SAFE
Analyst Projections
Analyst Consensus
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Based on our 6-factor quantitative model, QUEST DIAGNOSTICS INC (DGX) receives a "Hold" rating with a composite score of 51.1/100, ranked #273 out of 4446 stocks. Key factor scores: Quality 50/100, Value 62/100, Momentum 55/100. This is quantitative analysis only — not investment advice.
QUEST DIAGNOSTICS INC (DGX) Stock Analysis — April 2026 Rating, Price, and Forecast
Company Overview — What Does QUEST DIAGNOSTICS INC Do?
Quest Diagnostics Incorporated provides diagnostic testing, information, and services in the United States and internationally. The company develops and delivers diagnostic information services, such as routine testing, 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 patients, clinicians, hospitals, independent delivery networks, health plans, employers, direct contract entities, and accountable care organizations through a network of laboratories, patient service centers, phlebotomists in physician offices, call centers and mobile paramedics, nurses, and other health and wellness professionals. The company also provides risk assessment services for the life insurance industry; and healthcare organizations and clinicians robust information technology solutions. Quest Diagnostics Incorporated was founded in 1967 and is headquartered in Secaucus, New Jersey. QUEST DIAGNOSTICS INC (DGX) is classified as a large-cap stock in the Healthcare sector. The company is led by CEO James E. Davis and employs approximately 49,000 people, headquartered in Secaucus, New Jersey. With a market capitalization of $21.7B, DGX is one of the prominent companies in the Healthcare sector.
QUEST DIAGNOSTICS INC (DGX) Stock Rating — Hold (April 2026)
As of April 2026, QUEST DIAGNOSTICS INC receives a Hold rating with a composite score of 51.1/100 and 3 out of 5 stars from the Blank Capital Research quantitative model.DGX ranks #273 out of 4,446 stocks in our coverage universe. Within the Healthcare sector, QUEST DIAGNOSTICS INC ranks #8 of 838 stocks, placing it in the top 10% of its Healthcare peers. The rating is generated by a multi-factor model that weighs quality (30%), momentum (25%), value (15%), investment (10%), stability (10%), and short interest (10%).
DGX Stock Price and 52-Week Range
QUEST DIAGNOSTICS INC (DGX) currently trades at $191.51. The stock lost $6.31 (3.2%) in the most recent trading session. The 52-week high for DGX is $213.50, which means the stock is currently trading -10.3% from its annual peak. The 52-week low is $157.20, putting the stock 21.8% above its annual trough. Recent trading volume was 1.0M shares, reflecting moderate market activity.
Is DGX Overvalued or Undervalued? — Valuation Analysis
QUEST DIAGNOSTICS INC (DGX) carries a value factor score of 62/100 in the Blank Capital model, indicating fair valuation relative to historical norms. The trailing price-to-earnings ratio is 21.21x, compared to the Healthcare sector average of 23.63x — a discount of 10%. The price-to-book ratio stands at 3.02x, versus the sector average of 2.75x. The price-to-sales ratio is 2.03x, compared to 1.66x for the average Healthcare stock. On an enterprise value basis, DGX trades at 18.30x EV/EBITDA, versus 6.34x for the sector.
Overall, DGX's valuation appears roughly in line with sector benchmarks, suggesting the market is pricing the stock fairly given its current fundamentals and growth trajectory. Neither deep value nor significantly overpriced, the stock occupies a middle ground on valuation.
QUEST DIAGNOSTICS INC Profitability — ROE, Margins, and Quality Score
QUEST DIAGNOSTICS INC (DGX) earns a quality factor score of 50/100, indicating solid business quality with consistent operational execution. The return on equity (ROE) is 14.2%, compared to the Healthcare sector average of -43.5%, which is within a healthy range. Return on assets (ROA) comes in at 6.3% versus the sector average of -33.1%.
On a margin basis, QUEST DIAGNOSTICS INC reports gross margins of 33.2%, compared to 71.5% for the sector. The operating margin is 14.0% (sector: -66.1%). Net profit margin stands at 9.6%, versus -58.7% for the average Healthcare stock. Revenue growth is running at 17.5% on a trailing basis, compared to 10.6% for the sector. The overall profitability profile is adequate, though there may be room for margin expansion.
DGX Debt, Balance Sheet, and Financial Health
QUEST DIAGNOSTICS INC has a debt-to-equity ratio of 79.0%, compared to the Healthcare sector average of 32.0%. Leverage is within a manageable range for the industry, though investors should monitor debt trends over time. The current ratio is 1.04x, suggesting adequate working capital coverage. Total debt on the balance sheet is $5.67B. Cash and equivalents stand at $432M.
DGX has a beta of 0.20, meaning it is less volatile than the S&P 500, making it a relatively defensive holding. The stability factor score for QUEST DIAGNOSTICS INC is 93/100, indicating low-volatility characteristics and consistent price behavior that appeals to risk-averse investors.
QUEST DIAGNOSTICS INC Revenue and Earnings History — Quarterly Trend
In TTM 2026, QUEST DIAGNOSTICS INC reported revenue of $10.72B and earnings per share (EPS) of $8.87. Net income for the quarter was $1.03B. Gross margin was 33.2%. Operating income came in at $1.50B.
In FY 2025, QUEST DIAGNOSTICS INC reported revenue of $11.04B and earnings per share (EPS) of $8.87. Net income for the quarter was $1.05B. Gross margin was 33.2%. Revenue grew 11.8% year-over-year compared to FY 2024. Operating income came in at $1.56B.
In Q3 2025, QUEST DIAGNOSTICS INC reported revenue of $2.82B and earnings per share (EPS) of $2.18. Net income for the quarter was $259M. Gross margin was 33.7%. Revenue grew 13.2% year-over-year compared to Q3 2024. Operating income came in at $386M.
In Q2 2025, QUEST DIAGNOSTICS INC reported revenue of $2.76B and earnings per share (EPS) of $2.51. Net income for the quarter was $296M. Gross margin was 34.2%. Revenue grew 15.2% year-over-year compared to Q2 2024. Operating income came in at $438M.
Over the past 8 quarters, QUEST DIAGNOSTICS INC has demonstrated a growth trajectory, with revenue expanding from $2.40B to $10.72B. Investors analyzing DGX stock should weigh these quarterly trends alongside the valuation and quality metrics discussed above.
DGX Dividend Yield and Income Analysis
QUEST DIAGNOSTICS INC (DGX) currently pays a dividend yield of 1.6%. At this yield, a $10,000 investment in DGX stock would generate approximately $$163.00 in annual dividend income. The net margin of 9.6% provides reasonable coverage for the dividend, though investors should monitor payout sustainability.
DGX Momentum and Technical Analysis Profile
QUEST DIAGNOSTICS INC (DGX) has a momentum factor score of 55/100, reflecting neutral trend characteristics. The stock is neither significantly outperforming nor underperforming the broader market on a momentum basis. The investment factor score is 27/100, which measures capital allocation efficiency and asset growth patterns. The short interest score of 11/100 signals elevated short interest, which can indicate bearish sentiment among institutional investors.
DGX vs Competitors — Healthcare Sector Ranking and Peer Comparison
Comparing DGX against the S&P 500 benchmark is also instructive for understanding relative performance. Investors can view the full DGX vs S&P 500 (SPY) comparison to assess how QUEST DIAGNOSTICS INC stacks up against the broader market across all factor dimensions.
DGX Next Earnings Date
No upcoming earnings date has been announced for QUEST DIAGNOSTICS INC (DGX) at this time. Check the earnings calendar for the latest scheduling updates across all stocks in our coverage universe.
Should You Buy DGX? — Investment Thesis Summary
QUEST DIAGNOSTICS INC presents a balanced picture with arguments on both sides. The value score of 62/100 suggests attractive pricing relative to fundamentals. Low volatility (stability score 93/100) reduces downside risk.
In summary, QUEST DIAGNOSTICS INC (DGX) earns a Hold rating with a composite score of 51.1/100 as of April 2026. The rating is derived from the Blank Capital Research methodology, which combines six factor dimensions into a single quantitative ranking. Investors should consider these quantitative signals alongside their own fundamental research, risk tolerance, and investment time horizon before making buy or sell decisions on DGX stock.
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Institutional Research Dossier
QUEST DIAGNOSTICS INC (DGX) Deep Dive Analysis
Published on March 24, 2026
Action RatingHold
Sections
Executive Summary
Quest Diagnostics (DGX) currently holds a 'Hold' rating, reflecting a balanced view of its strengths and weaknesses. While the company demonstrates solid profitability and stability, its growth prospects and capital allocation efficiency raise concerns. The current valuation appears fair, but not compelling enough to warrant a more bullish stance, given the potential headwinds in the diagnostic testing market and the company's relatively high debt levels.
The primary takeaway is that Quest Diagnostics is a mature, stable player in a consolidating industry. Its ability to maintain market share and adapt to evolving healthcare trends will be crucial in determining its future performance. Investors should closely monitor the company's strategic initiatives, particularly its investments in advanced diagnostics and its efforts to improve operational efficiency, to assess its long-term growth potential.
Business Strategy & Overview
Quest Diagnostics operates as a leading provider of diagnostic testing, information, and services, primarily in the United States. The company generates revenue by performing a wide array of tests, ranging from routine blood work to complex genetic and molecular diagnostics. These services are offered to a diverse customer base, including patients, physicians, hospitals, and employers. Quest's business model relies on a vast network of laboratories and patient service centers, enabling it to efficiently collect and analyze samples.
Strategically, Quest Diagnostics focuses on expanding its test menu, enhancing its digital capabilities, and improving its operational efficiency. The company invests in research and development to introduce new and innovative diagnostic tests, catering to the growing demand for personalized medicine and precision diagnostics. Furthermore, Quest is actively pursuing partnerships and acquisitions to broaden its service offerings and geographic reach. A key element of their strategy involves direct-to-consumer testing options, allowing patients to proactively manage their health.
The diagnostic testing industry is characterized by intense competition, with major players such as Laboratory Corporation of America (LabCorp) and smaller regional laboratories vying for market share. The industry is also subject to regulatory scrutiny and reimbursement pressures, which can impact profitability. Quest Diagnostics differentiates itself through its scale, comprehensive test menu, and established relationships with healthcare providers.
Quest's product pipeline focuses on advanced diagnostics, including molecular diagnostics, genomics, and oncology testing. These tests offer higher margins and cater to the growing demand for personalized medicine. The company is also investing in data analytics and informatics to provide clinicians with actionable insights, improving patient outcomes and reducing healthcare costs. Quest's Quanum platform is a key component of this strategy, offering a suite of IT solutions for healthcare organizations.
The company's recent revenue growth of 17.5% (TTM) suggests successful execution of its strategic initiatives, although it is important to understand what portion of this growth is organic versus acquisition-driven. The company's focus on high-growth areas like advanced diagnostics and its investments in technology are crucial for maintaining its competitive position in the long term. However, the company must navigate the challenges of reimbursement pressures and increasing competition to sustain its growth trajectory.
Execution Benchmarks audit
Revenue Growth
YOY expansion rate
17.5%
Sector: 10.6%
+64% VS SCTR
Economic Moat Analysis
Quest Diagnostics possesses a narrow economic moat, primarily derived from its scale and established network of laboratories and patient service centers. While the diagnostic testing industry is competitive, Quest's extensive infrastructure provides a cost advantage and allows it to efficiently serve a large customer base. This scale also enables the company to invest in advanced technologies and offer a comprehensive test menu, which smaller competitors may struggle to replicate.
Switching costs for patients are relatively low, as they can easily choose alternative testing providers. However, physicians and hospitals may face higher switching costs due to established relationships, integration with electronic health records, and the need for reliable and accurate results. Quest's reputation for quality and reliability enhances its competitive position and creates some stickiness with its customer base.
Intangible assets, such as brand recognition and proprietary testing methods, also contribute to Quest's narrow moat. The Quest Diagnostics brand is well-known and trusted by healthcare providers and patients, which provides a competitive advantage in attracting and retaining customers. The company's investments in research and development have resulted in proprietary testing methods that differentiate it from competitors.
The moat is not wide because the barriers to entry in the diagnostic testing industry are not insurmountable. While building a national network of laboratories and patient service centers requires significant capital investment, smaller regional laboratories can compete effectively by focusing on specific geographic areas or niche markets. Furthermore, technological advancements and the increasing availability of point-of-care testing devices could erode Quest's competitive advantage over time.
The company's Quality score of 50/100 suggests that its profitability and returns are average compared to its peers. This indicates that its moat is not particularly strong, as it is not generating consistently superior returns on invested capital. The moat could widen if Quest successfully leverages its scale and technology to develop new and innovative diagnostic tests that are difficult for competitors to replicate. However, the company must continue to invest in research and development and adapt to evolving healthcare trends to maintain its competitive position.
Financial Health & Profitability
Quest Diagnostics exhibits a mixed financial profile. The company's revenue has grown steadily over the past few years, with a TTM revenue of $11.04 billion, representing a 17.5% increase compared to the previous year. This growth is partly attributable to increased testing volumes and strategic acquisitions. However, it's important to discern how much of this growth is organic versus inorganic.
Gross margins have remained relatively stable, hovering around 33%, as seen in the quarterly financial history. While this is a decent margin, it is significantly lower than the sector average of 71.9%, indicating potential inefficiencies or a different business model focus. Operating margins are also consistent, around 14%, but again, lower than what might be expected for a company of this size. Net income for the TTM period is $1.05 billion, resulting in a net margin of 9.6%, which is significantly better than the sector average of -54.1%.
The company's balance sheet reveals a substantial amount of debt, with a total debt of $5.67 billion and total cash of $432 million. This results in a relatively high debt-to-equity ratio of 79.00, compared to the sector average of 30.00. While the current ratio of 1.04 indicates sufficient liquidity to cover short-term obligations, the high debt level raises concerns about financial leverage and potential interest expense burdens.
Quest's ROE of 14.2% is positive and significantly outperforms the sector average of -42.5%, suggesting efficient use of equity. However, without free cash flow data, it's difficult to fully assess the company's cash-generating capabilities and its ability to service its debt. The Investment score of 27/100 suggests that the company's capital allocation and growth prospects are below average.
Analyzing the quarterly financial history reveals consistent revenue and profitability trends. However, the lack of free cash flow data limits the ability to assess the company's financial health comprehensively. The high debt level and relatively low gross margins are areas of concern that warrant further investigation. The company's ability to generate free cash flow and reduce its debt burden will be crucial in determining its long-term financial stability.
Valuation Assessment
Quest Diagnostics' valuation presents a mixed picture. The company's P/E ratio of 22.0x is slightly below the healthcare sector average of 24.3x, suggesting that the stock is fairly valued relative to its earnings. However, the P/E ratio alone does not provide a complete picture of the company's valuation.
The EV/EBITDA multiple of 4.4x is significantly lower than the sector average of 6.4x, indicating that the company may be undervalued based on its enterprise value and operating performance. This lower multiple could reflect concerns about the company's debt levels or its growth prospects.
Without free cash flow data, it is difficult to calculate the free cash flow yield, which is a key metric for assessing valuation. However, based on the company's net income and capital expenditures, it is likely that the free cash flow yield is relatively low, given the company's high debt levels and ongoing investments in research and development.
Considering the company's growth rate, profitability, and financial health, the current valuation appears to be fair. The stock is not significantly undervalued or overvalued, but rather reflects the company's strengths and weaknesses. The Value score of 62/100 suggests that the stock is reasonably priced, but not a bargain.
A more comprehensive valuation analysis would require a discounted cash flow (DCF) model, which would take into account the company's future growth prospects, cash flow generation, and discount rate. However, based on the available data, it appears that the stock is fairly valued, but not compelling enough to warrant a more bullish stance. Investors should closely monitor the company's financial performance and strategic initiatives to assess its long-term valuation potential.
Risk & Uncertainty
Quest Diagnostics faces several specific risks that could impact its business and financial performance. One of the most significant risks is regulatory scrutiny and reimbursement pressures. The diagnostic testing industry is subject to extensive regulation, and changes in reimbursement policies could significantly impact the company's revenue and profitability. For example, cuts in Medicare or Medicaid reimbursement rates could reduce the prices that Quest can charge for its services.
Another risk is competition from other diagnostic testing providers, including LabCorp and smaller regional laboratories. The industry is highly competitive, and Quest must continually innovate and improve its service offerings to maintain its market share. The increasing availability of point-of-care testing devices also poses a threat, as it could reduce the demand for traditional laboratory testing services.
The company's high debt levels also represent a significant risk. The company has a substantial amount of debt outstanding, which could increase its financial leverage and interest expense burden. This could limit the company's ability to invest in growth opportunities or return capital to shareholders. A rise in interest rates could further exacerbate this risk.
Technological obsolescence is another concern. The diagnostic testing industry is rapidly evolving, and Quest must continually invest in new technologies and adapt to changing customer needs. Failure to do so could result in a loss of market share and reduced profitability. The company's ability to successfully integrate new technologies and maintain its competitive edge is crucial for its long-term success.
Bulls Say / Bears Say
The Bull Case
BULL VIEWQuest Diagnostics is a stable, mature company with a strong market position in the diagnostic testing industry, providing consistent revenue and profitability.
BULL VIEWThe company's focus on advanced diagnostics and personalized medicine positions it for long-term growth in a rapidly evolving healthcare landscape.
The Bear Case
BEAR VIEWQuest Diagnostics' high debt levels and relatively low gross margins raise concerns about its financial leverage and operational efficiency.
BEAR VIEWThe diagnostic testing industry is highly competitive and subject to regulatory scrutiny, which could limit the company's growth prospects and profitability.
About the Author
Marques Blank
Founder & Chief Investment Officer, Blank Capital
Marques brings 15 years of institutional finance and investing experience, having overseen financial planning for a $1.6B defense business unit. He developed the proprietary 6-factor quantitative model used to score DGX and 4,400+ other equities.
QUEST DIAGNOSTICS INC exhibits a 53% valuation premium relative to institutional benchmarks. This represents a potential valuation overextension based on current multiples.
Return on Assets
Efficiency of asset utilization
6.3%
Sector: -33.1%
Gross Margin
Pricing power and cost efficiency
33.2%
Sector: 71.5%
Operating Margin
Core business profitability
14.0%
Sector: -66.1%
Net Margin
Bottom-line profitability
9.6%
Sector: -58.7%
Factor Methodology
The Quality factor evaluates the persistence and magnitude of cash flows. Companies with scores >70 exhibit superior competitive moats and financial resilience through economic cycles.
Sector Avg Yield0.00%
Yield Delta—
Income Projection audit
A $10,000 investment would generate approximately $163 annually in dividends at the current trailing rate.
