- Revenue Forecast Increase: Quest Diagnostics raised its full-year net revenue forecast to a range of $9.50 billion to $9.58 billion, up from a previous range of $9.40 billion to $9.48 billion.
- Adjusted EPS Projection: The company now sees adjusted EPS for the year between $8.80 and $9.00, revised from an earlier range of $8.72 to $8.97.
- Revenue Growth Outlook: Expected revenue growth for the year is now projected at 2.7% to 3.5%, up from a previous projection of 1.6% to 2.5%.
- Q2 Results Beat Estimates: In the second quarter, Quest Diagnostics reported:
- Adjusted EPS of $2.35, beating the estimate of $2.32
- EPS of $2.03
- Net revenue of $2.40 billion, above the estimate of $2.39 billion
- Adjusted operating profit of $398 million, surpassing the estimate of $394.2 million
- Adjusted operating margin at 16.6%, slightly below the estimate of 17%
- Capital expenditure at $92 million, under the estimated $111.5 million
- Diagnostic Information Services revenue of $2.33 billion, higher than the estimate of $2.31 billion
- CEO Comments: Jim Davis, Chairman, CEO, and President, noted the strong performance, attributing it to:
- Nearly 4% growth in base business revenue
- Total revenue growth of 2.5%
- Improved productivity and profitability in the base business
- Growth from new physician and hospital customers
- A favorable test mix with increased adoption of advanced diagnostics
- Continued strength in healthcare utilization
- Analyst Ratings: The company has been rated with 7 buys, 11 holds, and 0 sells.
Quest Diagnostics on Smartkarma
Quest Diagnostics is receiving positive analyst coverage on Smartkarma, an independent investment research network. Baptista Research published reports with a bullish sentiment on the company’s performance. In the report titled “Quest Diagnostics: Strengthening Revenue Growth Across Core Services! – Major Drivers,” it highlights the company’s nearly 6% base business revenue growth in Q1, sustained commercial focus on physicians and hospitals, investment in automation and AI, and a reevaluation of the full-year guidance. The growth in Q1 was attributed to the company’s strong focus on physicians, hospitals, and health plan access, driving new customer growth.
Another report by Baptista Research, “Quest Diagnostics: Continued Investment in New Technologies and Automated Solutions! – Major Drivers,” emphasizes the company’s strategy for top-line growth and profitability. In the fourth quarter and full year 2023 earnings call, Quest Diagnostics delivered 7% revenue growth in its base business while shifting away from COVID-19 testing. The analysis includes an evaluation of factors influencing the company’s future stock price and an independent valuation using the Discounted Cash Flow (DCF) methodology.
A look at Quest Diagnostics Smart Scores
| Factor | Score | Magnitude |
|---|---|---|
| Value | 3 | |
| Dividend | 3 | |
| Growth | 3 | |
| Resilience | 2 | |
| Momentum | 4 | |
| OVERALL SMART SCORE | 3.0 |
Smart Score is a compound score for the Company indicating its overall outlook. It is derived by taking an equally weighted average of underlying Factor scores computed by Smartkarma
Quest Diagnostics Incorporated, a company that provides diagnostic testing, information, and services through a national network of laboratories and patient service centers, has a mixed outlook based on the Smartkarma Smart Scores. While the company scores moderately in Value, Dividend, and Growth factors with a score of 3 for each, it falls slightly behind in Resilience with a score of 2. However, Quest Diagnostics excels in Momentum with a strong score of 4, indicating positive market momentum and investor sentiment.
Looking ahead, Quest Diagnostics may benefit from its consistent performance in value, dividend payments, and growth initiatives. The company’s strong momentum score suggests potential for continued market interest and upward stock price movement. However, its lower resilience score implies some vulnerability to external challenges. Overall, Quest Diagnostics‘ long-term outlook appears promising, especially considering its solid positioning in the diagnostic testing industry.
Disclaimer: This article by Smartkarma is general in nature and based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Note that our articles may not factor in the latest price-sensitive company announcements or qualitative material.
While all reasonable care has been taken in the preparation, Smartkarma makes no assurance about the accuracy of any generated data or content. All content is indicative only and should be independently checked for accuracy and confirmed before use. Smartkarma accepts no responsibility for any loss or damage caused as a result of any inaccuracy or error within the Lab online tools or generated data.
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