Is it Apt to Hold Quest Diagnostics Stock in Your Portfolio Now?

Quest Diagnostics DGX is well-poised for growth in the coming quarters, supported by its continued focus on meeting the evolving needs of its core customers — physicians, hospitals and consumers. The company is seeing continued momentum in Advanced Diagnostics, including the strong uptake of the AD-Detect blood test. Efforts to drive operational improvements through the adoption of AI, automation and other technologies also sound very encouraging. Yet, Quest Diagnostics’ solvency level remains a concern. Macroeconomic pressures can weigh on its operations, too.Over the past year, this Zacks Rank #3 (Hold) stock has rallied 7.7% compared with the industry’s 8.2% growth and the S&P 500 composite’s 23.2% rise. The renowned provider of diagnostic information services has a market capitalization of $21.59 billion. Quest Diagnostics has an earnings yield of 5.50%. The company’s earnings surpassed estimates in each of the trailing four quarters, delivering an average surprise of 3.50%.Tailwinds Supporting DGXGrowth Momentum in Base Business: Quest Diagnostics delivered high single-digit growth in physician channel revenues in first-quarter 2026, driven by strong demand for innovative testing solutions, expanded health plan access and enterprise account growth. The company also recorded growth in end-stage renal disease, a newer clinical area focused on lab testing for dialysis patients. Volume growth was driven by Fresenius Medical Care’s dialysis network and contributions from newly added independent dialysis clinics and other providers.In the hospital channel, the company’s flexible solutions allow customers to free up capital while accessing diagnostic innovation and expertise. In early 2026, Quest Diagnostics began scaling its Co-Lab Solutions, including reference laboratory testing, professional laboratory management services, laboratory workforce and supply-chain management, and analytics across all 21 hospitals of Corewell Health.Image Source: Zacks Investment ResearchThe consumer-testing platform, QuestHealth.com, continues to gain strong momentum. Quest Diagnostics is deepening partnerships with leading consumer health and wellness brands like WHOOP and OURA Health, integrating its extensive laboratory testing and technology directly into their mobile platforms.Strong Potential of Advanced Diagnostics: Quest Diagnostics drives growth across its customer channels through fast-growing, advanced diagnostics spanning five clinical areas — advanced cardiometabolic, autoimmune, brain health, oncology, and women's and reproductive health. In brain health, revenues from the AD-Detect blood test for Alzheimer's disease continued to grow at a double-digit rate in the first quarter of 2026.The cardiometabolic and endocrine portfolio growth was driven by robust demand for tests of Lp(a) and ApoB, as well as for kidney, liver and reproductive hormones.In oncology, the company continues to build its presence in blood-based minimal residual disease (MRD) testing. In January 2026, new research presented at the ASCO Gastrointestinal Cancers Symposium highlighted the strong clinical value of Quest Haystack MRD in monitoring colorectal cancer. The company also launched the Flow Cytometry MRD blood test for myeloma.Operational Excellence, a Strategic Priority: Quest Diagnostics’ Invigorate program consistently targets 2% annual savings through structured plans to drive savings and improve productivity across the value chain.  The company is deploying automation and AI technologies to improve quality, service, efficiency and the workforce experience. The new Quest AI Companion tool transforms complex biomarker data and reference ranges on test reports into clear, plain language. Quest Diagnostics is scaling the planning and design work for Project Nova, a multi-year initiative to transform its order-to-cash processes and systems and is on track to implement the first wave of solutions in the fall of 2027.What Ails DGX?Escalating Debt Level: At the end of the first quarter of 2026, long-term debt totaled $5.16 billion, while the cash and cash equivalent balance was only $393 million. The current portion of the debt was $503 million. Debt-to-capital ratio was 42.5%, down sequentially 1.6%.  A higher debt level induces higher interest payments, which come along with the risk of failure to pay the same. The times interest ratio, which indicates the company’s capacity to pay interest, was 6.3% in the quarter. Unstable Macroeconomic Backdrop: As the U.S. healthcare system continues to evolve, Quest Diagnostics faces several inherent risks. Government payers, such as Medicare and Medicaid, have taken steps to reduce the utilization and reimbursement of healthcare services, including clinical testing services. The industry-wide trend of consolidation has resulted in larger insurance plans with significant bargaining power, making it difficult for Quest Diagnostics to negotiate fee arrangements and possibly limiting access to its newer innovative solutions. With the new U.S. administration in place, any changes in U.S. healthcare regulation could have a material adverse effect on the company’s business.DGX Stock Estimate TrendThe Zacks Consensus Estimate for Quest Diagnostics’ 2026 earnings per share (EPS) has remained constant at $10.72 in the past 30 days. The consensus estimate for the company’s 2026 revenues is pegged at $11.83 billion. This suggests 7.2% growth from the year-ago reported number.Key PicksSome better-ranked stocks in the broader medical space are Globus Medical GMED, Align Technology ALGN and Integra LifeSciences IART.Globus Medical has an earnings yield of 5.9% compared to the industry’s negative 3.5% yield. Its earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 26.3%. GMED shares have rallied 35% against the industry’s 6.3% fall over the past year.GMED sports a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.Align Technology, sporting a Zacks Rank #1, has an estimated long-term earnings growth rate of 10.3% compared with the industry’s 5.5% growth. Shares of the company have dropped 6.8% against the industry’s 7.8% growth. ALGN’s earnings outpaced estimates in three of the trailing four quarters and missed on one occasion, the average surprise being 7.8%.Integra LifeSciences, carrying a Zacks Rank #2 (Buy), has an earnings yield of 13.6% against the industry’s negative 3.5% yield. Its earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, with the average surprise being 16.7%. IART shares have rallied 48.3% against the industry’s 6.4% decline over the past year.Research Chief Names "Single Best Pick to Double"From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.This company targets millennial and Gen Z audiences, generating nearly $1 billion in revenue last quarter alone. A recent pullback makes now an ideal time to jump aboard. Of course, all our elite picks aren’t winners but this one could far surpass earlier Zacks’ Stocks Set to Double like Nano-X Imaging which shot up +129.6% in little more than 9 months.Free: See Our Top Stock And 4 Runners UpThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks