Quest Diagnostics Incorporated
Orin's own judgment of how firmly the evidence points one way — not the chance the price goes up.
Quest Diagnostics is a buy.
FY2025 revenue grew 11.8% to $11.04B with operating margin expanding to 14.5% from 13.6% in FY2024, and Q2 2026 sustained double-digit revenue growth at 10.2% YoY with EPS of $2.84. The stock trades at a PE of 24.83 — roughly 50.7% below the peer median of 50.42 — despite four consecutive earnings beats culminating in a 10.6% surprise in the most recent quarter. FCF margin improved to 12.3% in FY2025 from 9.2% in FY2024, and the Waters Corporation HPV at-home screening partnership announced October 20, 2026 extends Quest's consumer-channel reach starting in 2027, supporting continued top-line momentum.
What could go wrong
- Gross margin compression. Gross margin has declined for four straight years from 39.0% in FY2021 to 31.9% in FY2025, a structural concern even as operating margin expands through cost discipline elsewhere.
- Persistent insider selling. Over the trailing 24 months, insiders net sold 273,646 shares for $53.7M, with CEO J.E. Davis selling 10,000 shares at $242.72 on September 1, 2026; zero open-market acquisitions were recorded.
- Elevated leverage. Total debt stood at $6.919B as of FY2025 against stockholders' equity of $7.170B, limiting financial flexibility if reimbursement pressures intensify.
- Extended above 200-day MA. At $237.12 the stock trades 13% above its 200-day MA of $209.48 and is pinned at the 50-day MA of $237.35, leaving limited near-term technical cushion.
What would change my mind
Where this comes from: FY25 fundamentals · Q2 2026 results · peer comparison · earnings vs estimates. Orin's read on DGX; not advice.
How has the share price moved?
Up 34.6% over twelve months, from $180.26 on 27 Oct 2025 to $242.56 at the Tue 27 Oct 2026 close. Its highest close in that time was $247.45 on 17 Sep 2026; the last close is 2.0% below it.
- Green line: the closing price each trading day.
- Grey line: the average closing price over the last 50 trading days.
- Dashed amber line: the same over the last 200 trading days — a slower, smoother line.
- Bars along the bottom: shares traded each day — green when it closed higher than the day before, rose when lower (the most, 3.8M, on 23 Jul 2026).
- Flags: the company's filings, on the day they were made (a 10-Q is the quarterly report and a 10-K the annual report; an 8-K reports a major event).
On file
All DGX filingsLargest holders · 13F Q2 2026
Money flow| Filer | Position | Of fund |
|---|---|---|
| BlackRock | $2.0B | 0.0% |
| Vanguard Capital Management | $1.5B | 0.0% |
| Vanguard Portfolio Management | $1.3B | 0.1% |
| State Street | $1.2B | 0.0% |
| T. Rowe Price Associates | $1.2B | 0.1% |
| JPMorgan Chase | $748.6M | 0.0% |
| Geode Capital Management | $662.6M | 0.0% |
| Morgan Stanley | $521.5M | 0.0% |
| EdgePoint Investment Group | $476.4M | 3.6% |
| Bank of America | $410.2M | 0.0% |
91 of the 815 filers we track · quarter ended Q2 2026 · positions, not flows
Insiders, last 24 months: 226 Form 4 filings; open-market trades net −$53.7M. Of the 50 on hand, 0 were open-market purchases and 7 sales — the rest are grants, option exercises and tax withholding.
Ask Orin about DGX
Orin answers questions about DGX from its filings, transcripts and numbers — with the source behind every claim. Your own desk starts with 3 free days, card required.
Start 3 free days →How is it priced, against its own past and its sector?
Priced at 23.8× its last 12 months of profit (Tue 27 Oct close) — higher than in all 5 of its last 5 fiscal years (middle 19.3×); the typical Healthcare company on the NYSE is at 25.8×.
| Measure | Now | Its usual | Sector |
|---|---|---|---|
| P/E | 23.8×above usual | 19.3× | 25.8× |
| P/S | 2.26×above usual | 1.75× | — |
| EV/EBITDA | 14.0×above usual | 11.7× | — |
| P/B | 3.5×above usual | 2.7× | — |
- "Its usual" is the middle of its own last 5 fiscal years.
P/E: the share price divided by one year of profit per share — roughly how many years of today's profit the price pays for. A company that loses money has no P/E.
P/S: the company's total market value divided by one year of revenue. Used when there is no profit to measure.
EV/EBITDA: the price of the whole company (its shares plus its debt, minus its cash) divided by one year of operating profit before interest, tax and write-downs.
P/B: the share price divided by the book value per share — what the company owns minus what it owes, as its accounts record it. When book value is tiny, P/B swings wildly and says little.
What do the analysts who cover it publish?
The analysts' average 12-month price target is $256 (from $245 to $262) — 6% above the Tue 27 Oct close price. That is their published opinion, not Orin's.
$256
$245 – $262 · +6% against the last close
- 4 buy or overweight
- 8 hold
- 0 underweight or sell
Price target: the share price an analyst publishes for about 12 months ahead. It is the opinion of the firm that wrote it; the average is across the firms that cover the company.
Overweight / underweight: analysts' rating words: overweight means the firm expects the stock to do better than the others it covers, underweight worse. Their words, not Orin's.
How is it priced next to the companies it is compared to?
Priced at 23.8× its last 12 months of profit. Only 2 of the 2 companies it is compared to made a profit (LH 27.2×, RVTY 77.1×), so there is no typical P/E.
| Company | Market value | P/E | EV/EBITDA | Gross margin | Net margin | ROE |
|---|---|---|---|---|---|---|
| DGXQuest Diagnostics Incorporated | $27B | 23.8× | 14.0× | 33.1% | 9.5% | 15% |
| LHLabcorp Holdings Inc. | $27B | 27.2× | 15.6× | 27.8% | 7.0% | 12% |
| RVTYRevvity, Inc. | $18B | 77.1× | 26.6× | 52.1% | 8.2% | 3% |
- The list of companies is the data vendor's choice, so it can include a company a person would not have picked.
Market value: the share price times the number of shares — what the whole company is priced at.
P/E: the share price divided by one year of profit per share — roughly how many years of today's profit the price pays for. A company that loses money has no P/E.
EV/EBITDA: the price of the whole company (its shares plus its debt, minus its cash) divided by one year of operating profit before interest, tax and write-downs.
Gross margin: the share of each $1 of sales left after the direct cost of making what was sold.
Net margin: the share of each $1 of sales kept as profit after every cost. Below zero, the company lost money.
ROE: return on equity: one year of profit as a share of the shareholders' money in the business (its book value).
Is it priced high or low compared with its own past?
Priced at 23.8× its last 12 months of profit (Tue 27 Oct close). It has no full fiscal year on file since its history starts, so there is nothing of its own to compare with.
- Now23.8×
P/E: the share price divided by one year of profit per share — roughly how many years of today's profit the price pays for. A company that loses money has no P/E.
Fiscal year (FY): the company's own 12-month accounting year, which need not match the calendar year.
How has its sector been priced?
Healthcare companies on the NYSE were priced at a typical 25.8× their yearly profit (Tue 27 Oct close).
- Now25.8×
- Each year is the middle of that calendar year's daily sector P/E; "Now" is the Tue 27 Oct close figure, the same one in the table above.
Sector P/E: the middle P/E of the companies in the same sector on the same stock exchange, as the data vendor works it out each day.
What does a cash-flow model say a share is worth?
A standard cash-flow model puts it at $189 a share — 22% below the $241.84 price it was computed against (27 Oct).
| Model | Value a share | Against the price then |
|---|---|---|
| Standard | $189 | 22% below $241.84 |
| Levered | $194 | 20% below $241.84 |
Discounted cash flow: a model's estimate of what the company is worth today, from the cash it is forecast to make in future years. Small changes in the forecast move it a lot, and it says little about a company that loses money.
Standard / levered: two versions of the cash-flow model: the standard one counts the cash before the company pays its lenders, the levered one after.