# Quest Diagnostics (DGX) Sector: Clinical laboratory diagnostics | Field | Value | |---|---| | Price | $258.69 | | Market cap | $28B | | Intrinsic value source | Analysts | | Data as of | 2026-11-12 | | Next earnings | 2027-02-09 (estimate) | Analysts: Leaning bullish Picks: Research only Discount category: Pricey ## In short The market doubts that Quest can keep double-digit volume growth and margin gains after its October data incident, and steady testing growth through 2027 can lift its value. ## Themes and gap - Themes: Regulation and courts (regulation-legal) - Gap type: Can close (closable) - Why: The Q4 2026 report in February 2027 and the Investor Day on March 25, 2027 show whether volume growth and margin hold after the data incident. ## About Quest Diagnostics Incorporated (Quest) provides diagnostic information services. It is based in Secaucus, New Jersey. It runs clinical laboratories and patient service centers in the United States. Quest says that it serves half the physicians and hospitals in the United States and one in three adult Americans each year. It has nearly 60,000 employees. Net revenues were $3,097 million in Q3 2026 and $9,035 million for nine months. Requisition volume rose 14.5% in Q3 2026, and revenue per requisition fell 4.2%. Jim Davis is Chairman, Chief Executive Officer and President. Quest formed a laboratory joint venture with Corewell Health in Michigan in January 2026. The shares trade on the NYSE in US dollars. Quest files 10-K and 10-Q reports. ## Thesis The price of Quest depends on whether volume growth of about 10% a year can continue with rising margin, and on how costly the data incident of October 2026 becomes. In Q3 2026, requisition volume rose 14.5% on strength in the physician, hospital and consumer channels, the adjusted operating margin rose to 16.7%, and adjusted earnings per share rose 15.4% to $3.00. Revenue per requisition fell 4.2%, so growth comes from volume. Quest raised its 2026 outlook in each of the first three quarters, to $11.25 to $11.35 of adjusted earnings per share. On October 21, 2026, Quest found unauthorized access to its Quanum LSM system, and it believes that an unauthorized party accessed some patient records. For the price to hold or rise, four things must be true. Volume growth must stay near 10% as the Corewell venture and the outreach lab assets of a health system add tests. Adjusted operating margin must keep rising while revenue per requisition falls. The incident must not bring large costs, claims or lost clients. Project Nova must stay on its plan to deploy Epic solutions in the first lab in the fall of 2027. The Q4 2026 report in February 2027 and the Investor Day on March 25, 2027 are the next tests. If growth and margin hold, the gap can close over the next year. If the incident grows or if payers cut prices, the gap can last longer. ## Checkpoints - Feb 9, 2027 (estimate): Q4 2026 results and 2027 outlook. Status: Pending. Watch: Quest meets its 2026 guidance of $11.25 to $11.35 of adjusted earnings per share, gives a 2027 outlook with higher earnings and shows a limited cost from the data incident, and this passes; a lower outlook or a large cost fails. - Mar 25, 2027: Investor Day. Status: Pending. Watch: Quest gives multi-year targets for volume growth and margin that match its 2026 pace, and this passes; lower targets fail. ## Balance sheet - Cash: $797M - Debt: $5.6B - Net debt: $4.8B - Debt due within 12 months: $10M At September 30, 2026, Quest had total debt of $5,550 million, of which $10 million is current, and cash of $797 million. Net debt was $4,753 million. Debt was $5,671 million and cash was $420 million at December 31, 2025. Quest issued $500 million of 5.000% senior notes due 2036 in May 2026. Cash from operations was $1,486 million for nine months, and Quest expects about $1.90 billion for 2026 with capital expenditures of about $550 million. Quest repurchased shares for $250 million and paid dividends of $279 million in nine months, and $1.2 billion of its repurchase authorization remained. Total stockholders' equity was $7,950 million. As of 2026-09-30. Sources: - https://www.sec.gov/Archives/edgar/data/1022079/000102207926000097/dgx093020268-kex991.htm - https://www.sec.gov/Archives/edgar/data/1022079/000102207926000108/dgx-20260930.htm ## Dividends - Dividend yield: 1.3% (last 12 months, at the current price) - Paid per share, last 12 months: $3.38 (4 payments) - Current annual rate: $3.44 ($0.86 x 4 a year) - Payout ratio: 36% of the earnings of the last fiscal year (the year ended 2025-12-31) - Latest ex-dividend date: 2026-10-06, $0.86 per share - Growth from 2020 to 2025: 7.3% a year - Growth from 2015 to 2025: 7.9% a year Dividends per share by year: 2016: $1.58, 2017: $1.80, 2018: $1.95, 2019: $2.12, 2020: $2.21, 2021: $2.42, 2022: $2.60, 2023: $2.79, 2024: $2.96, 2025: $3.15. Source: company filings and market data, read on 2026-11-13. ## Recent events - 2026-10-22: Quest reported Q3 2026 results. Revenues rose 10.0% to $3.10 billion, and adjusted earnings per share rose 15.4% to $3.00. Quest raised its 2026 guidance for revenue to $12.065 billion to $12.105 billion and for adjusted earnings per share to $11.25 to $11.35. It said that it will hold an Investor Day on March 25, 2027. - 2026-10-21: Quest learned of unauthorized access to its Quanum LSM system, which some clients use to place test orders and look up results. Quest said in an 8-K on October 22 that it believes an unauthorized party accessed some patient records, that the full scope is under investigation, and that the incident has not materially disrupted its business. - 2026-10-06: Quest said that Catherine T. Doherty will retire in July 2027. From November 1, 2026, she will lead health systems, the Corewell Health venture and Project Nova. - 2026-07-23: Quest reported Q2 2026 results. Revenues rose 10.2% to $3.04 billion, and adjusted earnings per share rose 19.1% to $3.12. Quest raised its 2026 guidance for adjusted earnings per share to $11.05 to $11.25. - 2026-05-06: Quest issued $500 million of 5.000% senior notes due 2036. It planned to use the proceeds for general purposes, including to repay $500 million of 3.45% notes that matured on June 1, 2026. - 2026-04-21: Quest reported Q1 2026 results. Revenues rose 9.2% to $2.90 billion, and adjusted earnings per share rose 13.1% to $2.50. Quest raised its 2026 guidance for adjusted earnings per share to $10.63 to $10.83. ## Latest news and filings - Last earnings: 2026-10-22 (8-K: https://www.sec.gov/Archives/edgar/data/1022079/000102207926000097/) - Next earnings: 2027-02-09 (expected; the company has not confirmed it) | Filed | Form | Headline | Period end | XBRL document | Link | | --- | --- | --- | --- | --- | --- | | 2026-10-23 | 10-Q | Quarterly report for the period ended Sep 30, 2026 | 2026-09-30 | dgx-20260930 | https://www.sec.gov/Archives/edgar/data/1022079/000102207926000108/dgx-20260930.htm | | 2026-10-22 | 8-K | Other company news | | | https://www.sec.gov/Archives/edgar/data/1022079/000094787126000941/ss6979200_8k.htm | | 2026-10-22 | 8-K | Earnings release | | dgx-20261022 | https://www.sec.gov/Archives/edgar/data/1022079/000102207926000097/ | | 2026-10-06 | 8-K | Change of directors or officers | | | https://www.sec.gov/Archives/edgar/data/1022079/000094787126000922/ss6908054_8k.htm | | 2026-07-23 | 10-Q | Quarterly report for the period ended Jun 30, 2026 | 2026-06-30 | dgx-20260630 | https://www.sec.gov/Archives/edgar/data/1022079/000102207926000070/dgx-20260630.htm | | 2026-07-23 | 8-K | Earnings release | | dgx-20260723 | https://www.sec.gov/Archives/edgar/data/1022079/000102207926000067/ | | 2026-05-21 | 8-K | Shareholder vote results | | dgx-20260520 | https://www.sec.gov/Archives/edgar/data/1022079/000102207926000052/dgx-20260520.htm | | 2026-05-08 | 8-K | New material agreement | | | https://www.sec.gov/Archives/edgar/data/1022079/000110465926057938/tm2613096d2_8k.htm | | 2026-05-01 | 8-K | Other company news | | | https://www.sec.gov/Archives/edgar/data/1022079/000110465926054141/tm2613096d1_8k.htm | | 2026-04-22 | 10-Q | Quarterly report for the period ended Mar 31, 2026 | 2026-03-31 | dgx-20260331 | https://www.sec.gov/Archives/edgar/data/1022079/000102207926000043/dgx-20260331.htm | Every filing on SEC EDGAR (CIK 1022079): https://www.sec.gov/cgi-bin/browse-edgar?action=getcompany&CIK=0001022079&type=&dateb=&owner=include&count=40 ## Risks - High: The data incident of October 2026 can cost a lot. The full scope is under investigation. Quest still faces claims and a state attorney general investigation from the 2019 AMCA data incident, as its 10-Q says. - Medium: Prices can fall. Revenue per requisition fell 4.2% in Q3 2026. Quest says in its 10-Q that it faces reimbursement pressures and cost increases, and its Invigorate program aims to offset them. - Medium: Project Nova is a large change to billing and IT systems. It is a multi-year project, and Quest expects its first Epic lab in the fall of 2027. A delay or a failure can raise cost. - Low: Debt is moderate. Total debt was $5,550 million at September 30, 2026, against $5,671 million at December 31, 2025. Quest issued $500 million of notes in May 2026 to repay notes that matured in June 2026. - Low: Joint ventures and acquisitions can disappoint. Quest formed a venture with Corewell Health, in which Corewell holds 49%, and it plans to buy outreach lab assets from a health system. ## Links - Page: https://picks.utilarium.app/company/DGX/ - History of changes: https://picks.utilarium.app/company/DGX/history/ - JSON with full history: https://picks.utilarium.app/data/company/DGX.json > Picks is a personal record of stock picks. It gives general opinions about stocks, including a "Top pick" label. They are not tailored to your needs, goals or risk tolerance. Kevin is not a registered adviser and relies on the general-advice exemption in Canadian securities law (NI 31-103 s.8.25). Do your own research, or ask a registered adviser. Kevin may hold any stock on this site. Prices, intrinsic values and ratings can be delayed or wrong; check the original source. Full disclaimer: /disclaimer/.