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What this page is: Delvantic's full research page for Quest Diagnostics Incorporated (DGX) — AI-driven forensic equity research: mechanical valuation models (DCF, EPV, anchored-PE, scenario) plus three independent AI lenses (Quality / Value / Sentiment). Everything below is rendered server-side; you are not missing content that requires JavaScript. All scores are predictions and research opinions, not financial advice.
Our current read (analysis of 2026-10-07): Designation Low · Gem Score -25 (−100…+100 Quality+Value blend) · Quality 34 · Value -64 · Sentiment 0 (timing only, not weighted) · Composite fair value $222.32 vs $242.76 at analysis
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profile-header/price-overview— company profile, live quote, market capextended-analysis— the core: three AI lens reads with findings, scores, and the analyst memofuture-predictions— our forward price-band predictionsmarket-narrative/ai-findings/gpt-critique— narrative context, cross-model findings, and an adversarial critique of our own analysis (near the end of the document)- Members-only sections (render as login gates for anonymous readers):
price-history,income-trend,key-metrics,financials(statement tables),insider-trading. The analysis above is public; the raw data tables require a free account.
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any ticker resolves at delvantic.com/stock/TICKER ·
raw inputs are public-company filings and market data (via licensed data feeds);
every model, score, lens read, and prediction on this page is Delvantic's own analysis.
Quest Diagnostics Incorporated
DGX NYSEQuest Diagnostics Incorporated is a healthcare diagnostics company that provides diagnostic testing and related information services. Quest Diagnostics supports physicians, hospitals, patients, health plans, employers, and government agencies with routine clinical testing, advanced specialty testing, anatomic pathology, and consumer-ordered testing services. Its offerings include laboratory testing for areas such as cancer, heart disease, diabetes, infectious diseases, and genetic conditions, along with services for drug and alcohol screening, risk assessment, and healthcare information technology. The company operates a broad network of laboratories and patient service centers across the United States, helping connect sample collection, analysis, and reporting within the medical care process. Quest Diagnostics Incorporated plays a central role in the healthcare market by providing data and laboratory insights that support diagnosis, treatment decisions, and ongoing health management.
Price Overview
Price History (1 Year)
Revenue & Net Income Trend
| Period | Revenue | Net Income | Net Margin | YoY/QoQ |
|---|
Key Metrics
EPS (Diluted): 8.75
Total Equity: $7.29B
Shares: 113,000,000
Total Debt: $5.67B
Cash: $420.00M
EBITDA: $2.13B
Total Debt: $5.67B
Cash: $420.00M
Revenue: $11.04B
Revenue: $11.04B
Revenue: $11.04B
Total Equity: $7.29B
Tax Rate: 23.8%
Equity: $7.29B
Total Debt: $5.67B
Cash: $420.00M
Current Liabilities: $2.28B
Long-Term Debt: $5.17B
Total Debt: $5.67B
Total Equity: $7.29B
Shares: 113,000,000
Shares: 113,000,000
CapEx: -$527.00M
Shares: 113,000,000
Stock Price: $242.76
Net Income: $992.00M
Industry Benchmarks
Income Statement (Annual)
Last updated: Aug 31, 2026 4:41am (37d ago)| Metric | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|
| Revenue | $10.8B | $9.9B | $9.3B | $9.9B | $11.0B |
| Cost of Revenue | $6.6B | $6.5B | $6.2B | $6.6B | $7.4B |
| Gross Profit | $4.2B | $3.4B | $3.1B | $3.2B | $3.7B |
| Operating Expenses | $1.8B | $2.0B | $1.8B | $1.9B | $2.1B |
| Operating Income | $2.4B | $1.4B | $1.3B | $1.3B | $1.6B |
| Net Income | $2.0B | $946.0M | $854.0M | $871.0M | $992.0M |
| EBITDA | $2.8B | $1.9B | $1.7B | $1.8B | $2.1B |
| EPS | $15.85 | $8.10 | $7.59 | $7.78 | $8.87 |
| EPS (Diluted) | $15.55 | $7.97 | $7.49 | $7.69 | $8.75 |
Balance Sheet (Annual)
Last updated: Aug 31, 2026 4:30am (37d ago)| Metric | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|
| Cash & Equivalents | $872.0M | $315.0M | $686.0M | $549.0M | $420.0M |
| Total Current Assets | $2.7B | $1.9B | $2.4B | $2.4B | $2.4B |
| Total Assets | $13.6B | $12.8B | $14.0B | $16.2B | $16.2B |
| Current Liabilities | $1.8B | $1.6B | $1.8B | $2.2B | $2.3B |
| Long-Term Debt | $4.0B | $4.0B | $4.4B | $5.6B | $5.2B |
| Total Liabilities | $7.0B | $6.8B | $7.6B | $9.3B | $8.9B |
| Total Equity | $6.6B | $6.0B | $6.4B | $6.9B | $7.3B |
| Retained Earnings | $7.6B | $8.3B | $8.8B | $9.4B | $10.0B |
Cash Flow (Annual)
Last updated: Aug 31, 2026 4:54am (37d ago)| Metric | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|
| Operating Cash Flow | $2.2B | $1.7B | $1.3B | $1.3B | $1.9B |
| Capital Expenditure | -$403.0M | -$404.0M | -$408.0M | -$425.0M | -$527.0M |
| Free Cash Flow | $1.8B | $1.3B | $864.0M | $909.0M | $1.4B |
| Acquisitions (net) | -$331.0M | -$144.0M | -$611.0M | -$2.2B | -$101.0M |
| Net Debt Issued / (Repaid) | -$2.0M | -$2.0M | $748.0M | $1.5B | -$602.0M |
| Dividends Paid | -$309.0M | -$305.0M | -$314.0M | -$331.0M | -$353.0M |
| Stock Buybacks | -$2.2B | -$1.4B | -$275.0M | -$151.0M | -$450.0M |
| Net Change in Cash | -$286.0M | -$557.0M | $371.0M | -$137.0M | -$129.0M |
Growth Trends (YoY %)
Last updated: Aug 31, 2026 4:41am (37d ago)| Metric | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|
| Revenue Growth | -8.4% | -6.4% | +6.7% | +11.8% |
| Gross Profit Growth | -18.4% | -11.1% | +6.3% | +13.0% |
| Operating Income Growth | -40.0% | -11.6% | +6.7% | +15.6% |
| Net Income Growth | -52.6% | -9.7% | +2.0% | +13.9% |
| EBITDA Growth | -33.1% | -8.8% | +8.1% | +15.6% |
Dividend History (Last 20)
Last updated: Aug 31, 2026 4:30am (37d ago)| Date | Dividend | Declaration | Record | Payment |
|---|---|---|---|---|
| 2026-07-08 | $0.86 | — | — | — |
| 2026-04-06 | $0.86 | — | — | — |
| 2026-01-13 | $0.80 | — | — | — |
| 2025-10-03 | $0.80 | — | — | — |
| 2025-07-07 | $0.80 | — | — | — |
| 2025-04-07 | $0.80 | — | — | — |
| 2025-01-14 | $0.75 | — | — | — |
| 2024-10-04 | $0.75 | — | — | — |
| 2024-07-08 | $0.75 | — | — | — |
| 2024-04-05 | $0.75 | — | — | — |
| 2024-01-16 | $0.71 | — | — | — |
| 2023-10-05 | $0.71 | — | — | — |
| 2023-07-10 | $0.71 | — | — | — |
| 2023-04-06 | $0.71 | — | — | — |
| 2023-01-17 | $0.66 | — | — | — |
| 2022-10-03 | $0.66 | — | — | — |
| 2022-07-05 | $0.66 | — | — | — |
| 2022-04-05 | $0.66 | — | — | — |
| 2022-01-18 | $0.62 | — | — | — |
| 2021-10-04 | $0.62 | — | — | — |
Deep Analysis
Risk : Reward — upside vs downside from this company's own quarters
Computed 2026-10-04 02:02A +1σ run of quarters pays -19%; a −1σ run costs 54%. Ratio -0.4:1 (μ 8.7%, σ 6.2% , 16 pairs).
Older method (repeat-worst-quarter): 0.8 : 1
| Case | Growth | Margin | Fair value | vs price ($242.76) |
|---|---|---|---|---|
| Bull — recovery | +14% | 17.3% | $324.73 | +34% |
| Base — stabilizes | +10% | 15.0% | $243.87 | +0% |
| Bear — keeps slipping | +5% | 12.8% | $178.85 | -26% |
| Stress — last quarter repeats | +7% | 9.2% | $142.25 | -41% |
| Upside — a +1σ run of quarters (v2) | +15% | 10.0% | $197.66 | -19% |
| Stress — a −1σ run of quarters (v2) | +3% | 8.4% | $112.70 | -54% |
Narrative Economics
market-narrative step).
Growth Outlook
Analyzed 2026-08-31 05:00The question every valuation on this page silently assumes: is this company likely to grow? Judged forward — the business, its category, the world — against what's already printed.
Claude Reading
Looking at the raw numbers first: Q2 2026 revenue of $3.04B is up 10.1% YoY from $2.76B, and net income of $320M vs $282M is +13.5% YoY — genuine acceleration, not just base effects. But zoom out: annual revenue went $10.79B (2021) → $9.25B (2023) → $11.04B (2025), meaning three years of essentially flat top-line before the recent rebound. Operating margin has collapsed from 22% in 2021 to 14.1% in 2025, and net margin from 18.5% to 9.0%. The current "growth" is partly M&A-driven recovery (Haystack, LifeLabs, various regional lab tuck-ins) rather than organic — which matters because you're paying 27.7x earnings for what is structurally a mid-single-digit organic grower being juiced by acquisitions funded off a $5.67B debt stack against only $420M cash and $7.29B equity.
The FCF CAGR of 25.4% flagged in momentum is misleading — it's measuring off a depressed 2023 base ($1.36B FCF in 2025 vs 2021's ~$1.8B pre-COVID normalization). Interest coverage is the real issue the synthesis flags correctly: $1.56B operating income against a debt load that at current rates costs ~$250-280M annually is fine but not comfortable, and it constrains the buyback lever the bull case leans on. ROIC of 9.45% is barely above cost of capital; ROE of 13.6% is unremarkable for a levered mature business. This is not a compounder — it's a levered rollup masquerading as one.
I largely agree with the synthesis "fully priced" verdict and the thesis evaluation's -10 score, but I think both are slightly too generous. The market-forces "neutral" read and narrative layer calling this an "anchored steady-compounder at 15% premium" underweight two things: (1) the multiple expansion from ~18x historical to 27.7x is not a modest premium — it's a 50%+ re-rating on a business whose margin structure has actively deteriorated, and (2) LabCorp trades at ~18x forward and has similar dynamics, so the peer comp screams DGX overvaluation, not sector premium. The "Lagging Sector Peers" signal confirms this. The insider sale on 7/28/2026 (1,600 shares) against tiny award-driven acquisitions is mildly negative but not dispositive.
A careful contrarian bull would argue: specialty/advanced diagnostics (oncology, Alzheimer's blood tests, molecular) are genuinely mix-shifting the revenue base toward higher-margin work, and the Q2 margin pop to 10.5% is the leading edge. If advanced diagnostics compound at 15%+ while routine grows 3%, blended margin could re-rate back toward 12-13% net by 2028, yielding ~$1.5B NI and justifying today's ~$27B market cap at a 18x exit. That's plausible but requires flawless execution and no reimbursement shock — and CMS pricing pressure via PAMA is a real, dated-but-still-live overhang the bear case correctly weights at 68/100. The contrarian bear counter is that at 15x EV/EBITDA for a low-teens ROIC business with declining margins over five years, you're paying growth-stock multiples for utility-like economics.
My verdict: dissent mildly from the "fully priced -13%" precision but agree on direction. Composite fair value at $210 feels about right — I'd anchor to $200-215 based on 20x normalized $1.05B NI plus a small quality premium, i.e., ~15-18% downside from $242.76. The recent quarterly acceleration is real but doesn't justify a 27x multiple on a business that generated more absolute net income in 2021 ($2.0B) than it does now ($992M TTM-ish). I would not short — the FCF and dividend support a floor and the advanced diagnostics optionality is real — but I would not own it here. Wait for either a multiple compression to $200-210 (18-19x forward) or evidence that Q2's 10.5% margin sustains for three more quarters, whichever comes first. The synthesis models are directionally correct; the narrative model's "85% fundamentals" framing understates how much the 27x multiple itself is the story.
GPT Reading
Quest’s raw numbers look better than the stock’s “mature, no-growth lab” stereotype, but not good enough to justify paying 27.7x earnings and 15.1x EV/EBITDA for it. The business has clearly rebuilt from the post-COVID digestion period: annual revenue went from $9.25B in 2023 to $9.87B in 2024 to $11.04B in 2025, and the quarterly run-rate has kept climbing from $2.49B in 2024’s third quarter to $3.04B in 2026’s second quarter. On a trailing four-quarter basis, revenue is about $11.57B and net income about $1.06B, which means the business is not just stabilizing but growing again. That said, margins are not showing the kind of structural step-up that would usually support this multiple. Net margin has lived mostly in the 8.3%-10.5% range across the last eight quarters, and the annual operating margin of 14.1% in 2025 is still well below the 2021 COVID-distorted 22%+ level. What I see is a solid, resilient operator regaining volume and mix, not a business that has become durably more profitable.
Cash generation is the best part of the story, but even there the valuation already gives the company full credit. In 2025, Quest produced $1.89B of operating cash flow and $1.36B of free cash flow after $527M of capex. That is real cash, and it supports the idea that the earnings base around $1.0B is not fragile. But against a $26.8B market cap, that free cash flow is only about a 5.1% yield, which is fine for a very steady compounder but not attractive enough when balance sheet leverage is material: $5.67B of debt against just $420M of cash. Debt-to-equity at 0.78 is manageable rather than alarming, but it does matter when the equity is already priced at a premium. ROIC of 9.5% and ROE of 13.6% are respectable, yet they are not “pay any price for quality” numbers. The market is treating Quest like a premium defensive with clean visibility, while the actual economics look more like a dependable but ordinary incumbent.
The biggest thing I think the optimistic framing misses is that the recent growth is strong in percentage terms because the base was depressed and the business is cyclically normalizing, not because a new growth engine is obvious in the reported data. Yes, Q2 2026 revenue of $3.04B was up roughly 10% from $2.76B a year earlier, and net income rose from $282M to $320M. But if this were a truly re-rated higher-quality model, I would expect either clearer margin expansion or substantially higher returns on capital. Instead, annual net income in 2025 was still just $992M versus $946M in 2022 despite revenue being higher, and still nowhere near 2021’s $2.0B. This says the company has replaced lost pandemic earnings with scale and mix, but not with a more advantaged business model. At $242.76, investors are paying as if mid-to-high single-digit EPS growth is highly dependable and deserves a premium multiple indefinitely. For a diagnostics incumbent facing reimbursement pressure, payer bargaining power, and a capital-intensive network, that is too generous.
The best case against my view is straightforward: Quest may deserve a structurally higher multiple than its pre-pandemic history because the revenue base is now larger, the quarterly trend is unambiguously up, and cash conversion is strong enough to support buybacks, debt service, and dividends simultaneously. A bull would point to trailing annualized revenue above $11.5B, the rebound in quarterly net margin to 10.5% in the latest quarter, and the fact that free cash flow of $1.36B covers the dividend easily with a payout ratio only 35.6%. They would also argue that a 1.37% yield understates total shareholder return because the real story is consistent capital deployment from a defensive healthcare asset. I take that seriously. If the company can keep growing revenue around high single digits while nudging margins up even 50-100 basis points, today’s multiple would look less stretched than the headline P/E suggests.
What would change my mind is not another “solid quarter” but evidence that Quest can turn this revenue recovery into meaningfully better economics. I would get more constructive if the next few quarters show revenue holding above a $12B annualized run-rate with net margins consistently above 10% and operating margin moving toward 15%-16% without leverage worsening. I would also want to see free cash flow move durably above $1.5B, or net debt come down enough that the equity story becomes a true cash compounding story rather than a mostly defensive one. Absent that, I think the stock needs either earnings to catch up or the price to come down; fair value is closer to the low-$210s to low-$220s than $243.
Grok Reading
The numbers tell a recovery story that has already been paid for. Quest printed $11.04B in 2025 revenue and $992M of net income, finally clearing the post-COVID trough of $9.25B/$854M in 2023, with the trailing four quarters now running at a $11.6B+ revenue pace and the June 2026 quarter hitting $3.04B and a 10.5% net margin. That sequential lift from $2.65B in early 2025 is real. Free cash flow of $1.36B on $527M of capex is the cleanest part of the print and supports the buyback-and-dividend machine. But the market is capitalizing this at 27.7x earnings and 15.1x EV/EBITDA for a business whose ROIC is 9.5% and whose ROE is 13.6%—returns that do not justify a growth multiple. Net debt sits at roughly $5.25B against only $420M of cash and a current ratio of 1.04; the balance sheet is levered enough that any sustained reimbursement squeeze or volume miss becomes an equity problem quickly. The 9.2% revenue CAGR and 25% FCF CAGR look attractive until you remember 2021 still shows $2.0B of net income on COVID volumes—today’s $1B run-rate is the rebased normal, not a depressed trough waiting to re-expand.
The valuation synthesis calling $210–217 fair value against $243 is directionally right. At a 5.1% FCF yield and 1.4% dividend yield, the equity is pricing mid-teens FCF compounding from a mature duopoly that still faces payer pressure and hospital outreach competition. Gross margin of 33.2% and operating margin of 14.1% have stabilized, not expanded; the mix-shift story into advanced diagnostics is visible in the recent 11.8% revenue and 13.9% earnings year-over-year prints, but it has not yet moved the company onto a structurally higher margin plane. Insider flow is noise—small awards and a 1,600-share sale—and adds nothing. This is a high-quality cash compounder being asked to deliver growth-stock economics it has not earned on the income statement.
The strongest counter is straightforward: cash generation is durable, the lab network is a real moat in routine testing, and an aging population plus preventive-care mix should keep volumes grinding higher in the mid-single digits even if pricing is flat. A skeptic of the cheap-call would point to the $1.36B FCF, the accelerating quarterly top line through mid-2026, and the fact that 27x is less egregious if you believe advanced diagnostics can push operating margin toward the mid-teens and sustain double-digit FCF growth. That case is coherent; I simply weigh the leverage, the sub-10% ROIC, the decelerating quarterly revenue confidence flag, and the historical 15–20x P/E band more heavily. Paying 13% above a conservative DCF for “defensive stability” only works if nothing goes wrong on reimbursement or volumes—an asymmetric bet I do not favor at $243.
I would flip constructive on a clean print showing net margin sustainably above 11% with sequential debt paydown below $5B, or on a forward year where specialty testing clearly drives organic revenue above 8% without acquisition noise. A multiple compression toward 22x on rising earnings would also reset the entry. Until then the stock sits rich relative to the cash it actually produces.
Big-3 Panel — where each AI stands
Advanced Analysis Forensic deep-dive · separate lenses
Quest is a mature, self-funding diagnostics business: FY25 revenue of 11.04B rebounded to a new high after the post-COVID trough (9.25B in 2023), and FCF recovered to 1.36B, roughly 12% of revenue. Earnings quality screens clean - OCF/NI of 1.57x, accruals -3.8% of assets, Beneish M of -2.67, and Altman Z of 3.66 all point to real, cash-backed earnings with no manipulation flags. Diluted share count has fallen from 128M in 2021 to 113M in 2025 (roughly -3.1% CAGR) with buybacks running 11x SBC, so per-share value is being concentrated rather than eroded. The balance sheet is the softer spot: net debt of -5.25B, only 420M liquid cash, and 504M of short-term debt exceeds cash on hand, so near-term maturities depend on refinancing or FCF, not a cushion. With 1.36B annual FCF this is manageable but not a fortress. Operating margin at 14.1% is well below the 22.1% 2021 print (which was COVID-inflated) and has been flat around 13.6-14.1% for three years, suggesting the core lab business runs at mid-teens op margins with limited operating leverage so far despite the revenue reacceleration. Gross margin has also drifted down from 39% to 33.2% and has not recovered. Insider tape is neutral - small routine awards and one 376K sale, no directional signal.
Verify before trusting this (5)
- Debt maturity ladder and terms of the 504M short-term debt - refinancing risk if rates stay elevated
- Whether 2025 revenue reacceleration is organic or M&A-driven (Quest has been acquisitive in regional labs)
- Payer mix and reimbursement pressure - CMS clinical lab fee schedule changes affect the mid-teens op margin
- Customer/payer concentration disclosed in 10-K
- Goodwill and intangibles balance relative to equity given acquisition cadence
The valuation synthesis lands at a composite FV of $217.51 and signal-adjusted $210.75, both below the current $242.76 price - implying -13% upside. The DCF ($217.03) is the credible anchor and aligns tightly with the composite; the anchored-PE of $364.23 looks like a runaway multiple extrapolation for a low-single-digit-growth diagnostics operator and I discount it heavily, while the EPV floor of $71.75 is a downside stress case, not a central estimate. Triangulating on the DCF as the honest number, deserved value sits in the $210-220 range. Earnings quality is high (no haircut needed) and the business is Solid, which supports paying the deserved price - but not paying above it. The market is already crediting Quest for its defensive cash flows, buyback cadence, and secular testing tailwinds; the 12-15% premium bakes in continued margin stability and no meaningful disruption from at-home testing or payer pressure. That is a reasonable base case but leaves zero cushion for the bear scenario (hospital lab insourcing, LabCorp price competition, mix shift). This is a fine business at a full price - the gap I get paid for is not here.
Verify before trusting this (4)
- Forward organic revenue growth guidance ex-acquisitions - is the underlying business actually growing or is it M&A-driven
- Segment margin trajectory vs pre-COVID baseline - has the base business margin actually recovered
- Any commentary on payer pricing renewals or Medicare clinical lab fee schedule changes
- Buyback pace relative to FCF and debt reduction priorities
None surfaced.
None surfaced.
The world is pushing diagnostic volume toward large independent networks: hospitals shed outreach labs to cut cost, payers steer members to lower-priced in-network labs, and aging plus chronic-disease monitoring raises tests per capita. Simultaneously the payer/government side compresses unit price, so the industry grows in volume and shrinks in price — a structure that rewards the lowest-cost, highest-scale processor and punishes subscale labs. That is precisely Quest's position, which is why it can consolidate. The offsets are political rather than technological: reimbursement reform and insurance coverage contraction are the levers that could turn a 6-8% grower into a 3-4% grower. At-home and AI 'disintermediation' narratives are weak here — specimens still need accredited, high-throughput analysis and payer contracts, which is the moat, not the interface.
When we made this prediction on Aug 31, 2026, DGX was $241.15. We expect it to be $227.00 by Mar 2027, and we consider it great value under $205.00. This is an early model (v0.6.0) — the direction is more reliable than the exact price. Made Aug 31, 2026.
Blue is our prediction, starting the day we made it. Grey is a slower route to the same place — the same destination, taking longer. Black is the actual price, so you can see how we are doing.