Start here if you're new
what it is
Quest runs labs that test samples for the doctors, hospitals, insurers, employers, and government agencies that send it about one-third of U.S. adults each year.
how it gets paid
Last year Quest Diagnost made $11.0B in revenue. Routine diagnostics was the main engine at $5.3B, or 48% of sales.
why it's growing
Revenue grew 11.8% last year. Management laid out an outlook for 2026 that resulted in boosted expectations on our part.
what just happened
Quest beat revenue by $50 million and EPS by 2.1%.
At a glance
B++ balance sheet — above average — nothing keeping you up at night
60/100 earnings predictability — reasonably predictable
21.0x trailing p/e — priced about right
1.7% dividend yield — cash in your pocket every quarter
13.5% return on capital — nothing to write home about
xvary composite: 66/100 — average
What they do
Quest runs labs that test samples for the doctors, hospitals, insurers, employers, and government agencies that send it about one-third of U.S. adults each year.
Quest touches about one-third of U.S. adults each year. If your doctor uses Quest, switching labs means rerouting samples, billing, and staff across a network with 56,000 employees. That is not a small change. That is a headache.
How they make money
$11.0B
annual revenue · their business grew +11.8% last year
Routine diagnostics
$5.3B
+5.0%
Advanced diagnostics
$2.1B
+11.0%
Anatomic pathology
$1.5B
+7.0%
Employer and payer services
$1.4B
+6.0%
Clinical research and other
$0.7B
0.0%
The products that matter
routine and clinical lab testing
Core Lab Testing
$11.0B revenue · 20.6% operating margin
it is still the center of gravity: an $11.0B revenue base running at a 20.6% operating margin. If that margin slips, the whole story changes.
core engine
specialized and higher-value testing
Advanced Diagnostics
150+ tests · supports $11.70B–$11.82B guide
this is the growth lever management keeps pointing to. The menu now includes more than 150 tests, and it is part of the push to get 2026 revenue into the $11.70B–$11.82B range.
mix upgrade
long-term hospital volume agreements
Health System Partnerships
Corewell Health and Fresenius assets featured in recent commentary
these deals matter because routed testing volume compounds. If partnerships like Corewell Health and the acquired Fresenius-related assets add durable volume, the network gets harder to displace.
volume moat
Key numbers
$11.0B
annual revenue
That is the top line. A bigger base gives Quest more room to spread lab costs.
21.0x
price-to-earnings
You pay $21 for each $1 of trailing profit. That is a full price for a steady lab business.
1.7%
dividend yield
You get $1.70 a year for every $100 invested. Nice cushion, not a rescue plan.
13.5%
return on capital
Each $100 invested in the business earns $13.50 of operating profit. That is solid for a defensive company.
Financial health
B++
strength
- balance sheet grade B++ — above average financial health
- risk rank 2 — safer than 80% of stocks
- price stability 95 / 100
- long-term debt $5.2B (18% of capital)
- net profit margin 12.0% — keeps 12 cents of every dollar in revenue
- return on equity 18% — $0.18 profit for every $1 investors have put in
B++ — functional but not a standout on the balance sheet.
Total return vs. market
You invested $10,000 in DGX 3 years ago → it's now worth $15,020.
The index would have given you $13,880.
source: institutional data · total return
What just happened
beat estimates
Quest beat revenue by $50 million and EPS by 2.1%.
Fourth-quarter revenue hit $2.806B, up 7.1% vs. prior year. EPS came in at $2.42 versus $2.37 expected.
$2.81B
revenue
$2.42
profit per share
7.1%
revenue growth
revenue beat
The $2.806B print matters because it beat estimates by $50M and kept the 2025 growth story alive.
-
quest diagnostics posted annual revenue and earnings growth of 12% and 9%, respectively, in 2025.
-
fourth-quarter revenues topped the bar by $50 million, coming in at $2.806 billion, which represented a vs. prior year gain of just over 7%.partnerships with corewell health and acquired assets from fresenius medical were highlighted on that front.
-
separately, 3% annual cost savings and productivity improvements had profits running higher, with the use of ai, automation, and google cloud getting credit.for the year as a whole, revenues chimed in at $11.035 billion, translating to share earnings of $9.85.
-
management laid out an outlook for 2026 that resulted in boosted expectations on our part.
-
new testing within the advanced diagnostics portfolio should move the top line higher.expanded offerings now include more than 150 tests, including the elite health panel, which uses over 85 biomarkers. with that, revenues for the current year are anticipated in a band from $11.70 billion to $11.82 billion.
source: company earnings report, 2026
Get this snapshot in your inbox
This page, delivered free — plus weekly updates when the numbers change. plain english, no spam.
weekly updates
earnings alerts
plain english
no spam
What could go wrong
the #1 risk is insurer reimbursement pressure on routine lab testing.
med
routine test pricing gets squeezed
Quest lives inside negotiated reimbursement schedules. If insurers or government programs push those rates lower, the hit shows up quickly because this is still an $11.0B testing network built on high volume.
impact: even modest price pressure matters when net margin is only 10.2%.
med
health system deals fail to add enough routed volume
Corewell Health and the Fresenius-related assets were highlighted for a reason. The thesis needs those partnerships to feed more tests into the network and reinforce scale.
impact: if partnership volume disappoints, the growth case leans back on mature core testing.
med
advanced diagnostics stays interesting but not material
More than 150 tests sounds good. The real question is whether they move mix and revenue enough to support the $11.70B–$11.82B 2026 range.
impact: if new tests do not scale, investors are left paying 21.0x earnings for a slower lab company.
med
cost savings do the work that pricing cannot
Management cited 3% annual cost savings from automation, AI, and cloud tools. Helpful, but it also means operating leverage is being manufactured, not handed over by the market.
impact: if those savings stall, protecting the 20.6% operating margin gets harder.
a reimbursement squeeze or margin miss would hit the same place: an $11.0B revenue base that only keeps about 10 cents of each dollar.
source: institutional data · regulatory filings · risk analysis
Pay attention to
guide
the $11.70B low end
that is the easiest scorecard for the whole year. If management starts guiding below it, the steady-growth case weakens fast.
margin
operating margin vs. 20.6%
Quest does not have endless pricing power, so margin protection matters as much as revenue growth.
reimbursement
payer rate updates
routine lab testing is a negotiated-price business. Fee pressure shows up quickly when net margin is only 10.2%.
mix
advanced diagnostics adoption
the 150+ test portfolio needs to become a meaningful revenue mix shift, not just a better-looking slide deck.
Analyst rankings
short-term outlook
average
momentum score 3 — in human-speak, analysts do not see a strong short-term edge here.
risk profile
above average
stability score 2 — safer than roughly 80% of stocks. This is the comfort-stock part of the story.
chart momentum
average
technical score 3 — the stock is moving with the broader market, not breaking away from it.
earnings predictability
60 / 100
predictable enough for a mature health-care name, but not so predictable that you can stop watching quarterly execution.
source: institutional data
Institutional activity
institutions have been net buying for 3 consecutive quarters — 461 buyers vs. 414 sellers in 3q2025. total institutional holdings: 0.1B shares. net buying for 3 quarters.
source: institutional data
Price targets
3-5 year target range
$148
$239
$207
current price
$194
target midpoint · 6% from current · 3-5yr high: $245 (+20% · 6% ann'l return)
Want the deeper analysis?
The full deep dive: dcf model, scenario analysis, competitive moat breakdown, and quarterly tracking — everything on this page, taken further.
see plans from $5/moThe deep dive