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Quest Diagnostics Inc - Stock Quote DGX

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Morningstar's Quest Diagnostics Inc Stock Analysis

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Quest Diagnostics Posts Decent Q1 Results and Further Declines as COVID Recedes; FVE Unchanged

Debbie S. Wang Senior Equity Analyst

Analyst Note

| Debbie S. Wang |

The omicron surge helped extend Quest Diagnostics’ relatively strong top-line growth into the first quarter of 2022. Despite management’s adjustments to the lower end of its COVID-19 outlook, we’re leaving our fair value estimate unchanged, as we expect demand for pandemic-related tests will decline significantly through this year, and our top- and bottom-line assumptions remain bounded by the revised outlook. Though operating margin should continue to moderate this year as COVID-19 PCR tests decline, we remain confident in the firm’s superior cost advantage, which supports its narrow economic moat. We view this cost advantage as a key factor that allows Quest to engage in value-based reimbursement programs and partner with the largest commercial payers, including UnitedHealth and Anthem.

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Quest Diagnostics Inc's Company Profile

Business Description

Quest Diagnostics is a leading independent provider of diagnostic testing, information, and services in the U.S. The company generates over 95% of its revenue through clinical testing, anatomic pathology, esoteric testing, and substance abuse testing with specimens collected at its national network of roughly 2,300 patient service centers, as well as multiple doctors offices and hospitals. The firm also runs a much smaller diagnostic solutions segment that provides clinical trials testing, risk assessment services, and information technology solutions.

500 Plaza Drive
Secaucus, NJ, 07094
T +1 973 520-2700
Sector Healthcare
Industry Diagnostics & Research
Most Recent Earnings Mar 31, 2022
Fiscal Year End Dec 31, 2022
Stock Type Aggressive Growth
Employees 49,000

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