Quest Diagnostics Incorporated DGX
Quest Diagnostics posted strong FY2025 results with revenue of $11.04B (+11.8% YoY), EPS of $8.75 (+13.8% YoY), and FCF of $1.36B versus $909M in FY2024, while operating margin expanded from 13.63% to 14.53%. However, gross margin compressed for a third consecutive year to 31.93% (from 32.86% in FY2024 and 33.17% in FY2023), and the stock is trading near its 52-week high of $246 at $240.30 with EV/EBITDA of 16.08x slightly above the peer median of 15.76x.
With net insider selling of $15.7M over 24 months and a modest smart money score of 0.0073 as of the quarter ended 2026-06-30, the fundamental improvements are largely reflected at current levels.
What could go wrong
- Gross margin erosion. Gross margin has compressed for three straight years to 31.93% in FY2025 from 32.86% in FY2024 and 33.17% in FY2023, signaling pricing or cost pressures that could eventually weigh on operating leverage.
- Elevated leverage. Total debt of $6.92B against stockholders' equity of $7.17B as of FY2025 leaves limited balance sheet flexibility for further M&A or buybacks without additional leverage.
- Insider selling. Net insider selling of $15.7M over the trailing 24 months with 109 dispositions versus 107 acquisitions, including recent option exercise-and-sell transactions by the SVP & General Counsel on 2026-08-28.
- Reimbursement and regulatory headwinds. A Zacks article dated 2026-08-21 flagged debt and reimbursement risks despite growth across key channels and advanced diagnostics.
What would change my mind
Where this comes from: FMP annual fundamentals, FY2025 · FMP annual fundamentals and derived_metrics, FY2025 · FMP annual fundamentals, FY2025 and FY2024 · Derived metrics, FY2023–FY2025. Orin's read on DGX; not advice.
Twelve months actual closes to 2026-09-23 · actual filings
50-day average 200-day average · volume below
On file
All DGX filingsLargest holders · 13F Q2 2026
Money flow| Filer | Position | Of fund |
|---|---|---|
| Vanguard Capital Management | $1.5B | 0.0% of fund |
| Vanguard Portfolio Management | $1.3B | 0.1% of fund |
| State Street | $1.2B | 0.0% of fund |
| Price T Rowe Associates /Md/ | $1.2B | 0.1% of fund |
| Jpmorgan Chase & | $748.6M | 0.0% of fund |
| Geode Capital Management | $662.6M | 0.0% of fund |
89 filers · quarter ended Q2 2026 · positions, not flows
Insiders, last 24 months: 217 Form 4 filings, net −$18.2M. Of the 50 on hand, 0 were open-market purchases and 10 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 →Where it trades
| Metric | Now | Own median | Sector |
|---|---|---|---|
| P/E | 24.4× | 19.2× | 26.4× |
| EV/EBITDA | 15.7× | 11.7× | — |
| P/S | 2.22× | 1.75× | — |
| P/B | 3.4× | 2.7× | — |
Its P/E sits above all 5 of the last 5 years (+2.15σ from its own mean).
7.0%
free-cash-flow growth every year for 10 years, discounted at 10%, is what today’s price implies — starting from $1.4B of trailing free cash flow. It is an assumption the market is making, not a forecast Orin is making.
What Wall Street published
$249
$225 – $260 · +6% against today's price
- 13 buy or overweight
- 18 hold
- 3 underweight or sell
The analysts’ consensus and their own ratings, not Orin’s. A target is a twelve-month opinion published by the firm that wrote it.
Against the companies it is compared to
| Company | Market cap | P/E | EV/EBITDA | Gross | Net | ROE |
|---|---|---|---|---|---|---|
| DGXQuest Diagnostics Incorporated | $26B | 24.4× | 15.7× | 33.1% | 9.2% | 14% |
| INCYIncyte Corporation | $25B | 15.3× | 10.4× | 92.6% | 27.7% | 30% |
| LHLabcorp Holdings Inc. | $25B | 25.0× | 14.7× | 27.8% | 7.0% | 12% |
| WATWaters Corporation | $41B | 104.6× | 51.4× | 50.8% | 3.6% | 2% |
| WSTWest Pharmaceutical Services, Inc. | $26B | 47.8× | 32.0× | 36.8% | 17.0% | 19% |
| ZBHZimmer Biomet Holdings, Inc. | $18B | 22.0× | 12.6× | 69.9% | 9.5% | 6% |
The median is of the 5 peers listed above and nothing else — check it against the column. This company trades 2.2% below it. The peer set is the vendor’s, so a company can appear here that a person would not have chosen.
What it has traded at
What its sector has traded at
Two scales, drawn separately on purpose: a sector median and one company’s multiple are not the same number and putting them on one axis invites a comparison neither series supports.
Discounted cash flow
| Model | Fair value | Against | Computed |
|---|---|---|---|
| Standard DCF | $219 | $203.79 · +7% | 2026-06-10 |
| Levered DCF | $223 | $203.79 · +10% | 2026-06-10 |
The vendor’s intrinsic-value models. Treat them as a low-growth anchor — for a fast grower the market routinely pays well above a DCF. These were computed against the price in the “against” column, not today’s.
Every estimate on one scale
The vertical rule is the current price. Ranges and point estimates are the backend’s, published as they were calculated; an arrow means the estimate sits beyond this scale, and its number is on the right.