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what it is
Labcorp runs medical tests for patients and hospitals, and it helps drug companies manage studies and lab work.
how it gets paid
Last year Labcorp made $14.0B in revenue. Routine and core lab testing was the main engine at $5.6B, or 40% of sales.
why it's growing
Revenue grew 7.2% last year. Growth in the top line should be driven by increased demand for diagnostic testing.
what just happened
Labcorp posted Q4 EPS of $4.07, beating the $3.98 estimate while full-year EPS reached $16.44.
At a glance
B++ balance sheet — above average — nothing keeping you up at night
55/100 earnings predictability — expect surprises
17.2x trailing p/e — the market's not buying it — or you found a deal
1.1% dividend yield — cash in your pocket every quarter
12.5% return on capital — nothing to write home about
xvary composite: 65/100 — average
What they do
Labcorp runs medical tests for patients and hospitals, and it helps drug companies manage studies and lab work.
This business wins because your doctor, hospital, and insurer already plug into Labcorp’s network, and switching labs is a paperwork migraine. Scale → lots of volume through the same system → lower cost per test, so what: 750 million tests in 2025 gives Labcorp reach that smaller labs cannot fake. It also operates in over 100 countries, which matters when drug companies want one vendor instead of ten.
How they make money
$14.0B
annual revenue · their business grew +7.2% last year
Routine and core lab testing
$5.6B
+4.0%
Specialty testing
$3.5B
+8.0%
Central laboratory services
$2.8B
+7.5%
Early development and research support
$1.4B
+6.0%
Data, companion diagnostics, and other
$0.7B
+5.0%
The products that matter
diagnostic testing services
Diagnostics
$14.0B platform
diagnostic testing anchors the $14.0B business, and Labcorp kept 10.2% of revenue as net profit. This is the part that pays the bills.
core cash flow
clinical trial support
Drug Development Support
scale matters
this activity sits inside the same $14.0B platform, but the page does not provide a separate revenue line. What you can measure is the consolidated business: 16% return on equity and a business large enough to matter in both care delivery and research.
volume lever
fixed-cost lab network
Laboratory Network
margin leverage
a 33.7% jump in revenue only turns into a better stock if the network stays busy. When utilization slips, fixed costs show up fast and that 10.2% margin stops looking comfortable.
operating leverage
Key numbers
17.2x
trailing p/e
P/E → price-to-earnings → so what: you are paying 17.2 years of current earnings for a business with defensive demand.
$14.0B
annual revenue
That scale matters because lab testing is a volume business, and big networks spread fixed costs better than small ones.
19.4%
operating margin
Operating margin → profit after running the business → so what: Labcorp keeps about 19 cents from each sales dollar before interest and taxes.
12.5%
return on capital
Return on capital → profit from money invested → so what: this business earns more than a plain utility, but it is not a software fantasy.
Financial health
B++
strength
- balance sheet grade B++ — above average financial health
- risk rank 2 — safer than 80% of stocks
- price stability 90 / 100
- long-term debt $5.1B (18% of capital)
- net profit margin 10.8% — keeps 11 cents of every dollar in revenue
- return on equity 16% — $0.16 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 LH 3 years ago → it's now worth $13,760.
The index would have given you $13,880.
source: institutional data · total return
What just happened
beat estimates
Labcorp posted Q4 EPS of $4.07, beating the $3.98 estimate while full-year EPS reached $16.44.
2025 sales grew 7.2% to $14.0B and earnings grew 13% to $16.44 per share. The last reported quarter beat by 2.26%, which fits the picture of a steady operator, not a miracle stock.
$10.4B
revenue
$8.48
eps
28.9%
gross margin
the number that mattered
The most important number was full-year EPS of $16.44, because it topped management's own bracket and supports the 2026 estimate of $17.90.
-
labcorp posted sales and earnings growth for 2025 of 7.2% and 13%, respectively.
-
december-period results came out on the day this issue rolled to the presses.
-
for its most recent update, management had provided sales parameters that equated to 7.4% to 8.0% growth, down from 7.5% to 8.6%, and an earnings bracket running from $16.15 to $16.30.
-
the $16.44 per-share figure topped this bracket.the early development space within the contract drug development arm continues to need a watchful eye. biotech concerns on lh’s client roster have been delaying or canceling early-stage operations and talk of a divestiture or restructuring is evident.
-
we look for steady gains in both 2026 and 2027.growth in the top line should be driven by increased demand for diagnostic testing, coupled with improvements in performance at biopharma laboratory services. acquisitions will likely play a role, as well, but such pacts are not factored into our presentation until they are fully completed. recent agreements have buoyed operations in the high-volume tristate area, while we look for management to strike in fields with strong growth prospects, like oncology and neurology,.
source: company earnings report, 2026
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What could go wrong
Labcorp's biggest risk is testing and trial volume softening while the fixed-cost lab network stays in place.
med
volume slows faster than expected
At $14.0B of revenue and a 10.2% net margin, even modest demand pressure matters. This is a business where less throughput can show up quickly in earnings.
If volume weakens, the market stops treating 17.2x earnings as reasonable and starts treating it as optimistic.
med
utilization and mix go the wrong way
Lab businesses carry real fixed costs. If the more profitable testing work slows or utilization slips, operating leverage works in reverse.
You would feel it through margin first, and that 10.2% net margin is not high enough to ignore.
med
the stock stays merely fine
The 3–5 year target midpoint is $312 versus a current price of $282.63. That leaves some upside, but not much protection if estimates start drifting down.
A steady company can still be an average stock when upside is capped and institutions are already net sellers.
If revenue growth cools and net margin falls below the current 10.2%, you do not need a disaster for the stock to re-rate. You just need the market to stop paying a steadiness premium.
source: institutional data · regulatory filings · risk analysis
Pay attention to
calendar
next earnings update
The next report matters because this story depends on confirmation, not excitement. You want to see whether the move from $14.0B toward $15B still looks intact.
trend
margin durability
A 10.2% net margin is solid, but not untouchable. If revenue stays firm and margin holds, the stock can keep grinding higher without needing a new narrative.
risk
institutional selling streak
Two consecutive quarters of net selling does not equal panic. It does tell you the big-money vote is still split.
metric
earnings predictability
55 / 100 is the quiet warning label on this page. If that score drops, the valuation deserves less trust.
Analyst rankings
short-term outlook
average
momentum score 3 — in human-speak, analysts do not see a strong near-term edge.
risk profile
above average
stability score 2 — safer than roughly 80% of stocks, which fits the defensive-healthcare appeal.
chart momentum
average
technical score 3 — the chart is behaving normally, not signaling a breakout or a breakdown.
earnings predictability
55 / 100
earnings can still surprise you. That matters more here than in a pure utility-style defensive name.
source: institutional data
Institutional activity
institutions have been net selling for 2 consecutive quarters — 417 buyers vs. 427 sellers in 3q2025. total institutional holdings: 78.2M shares. net selling for 2 quarters.
source: institutional data
Price targets
3-5 year target range
$236
$387
$283
current price
$312
target midpoint · +10% from current · 3-5yr high: $415 (+45% · 11% ann'l return)
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