Is it the Right Time to Add Labcorp Stock to Your Portfolio?

Labcorp Holdings Inc. LH, or Labcorp, is well-poised for growth in the coming quarters owing to its progress on its strategic priority to lead in important specialty testing areas, which are growth drivers for both its businesses. Strategic partnerships and acquisitions help the company broaden its patient and provider network while deepening its presence in key markets. Additionally, it leverages AI and technology to enhance margins and customer experience. Yet, macroeconomic pressures and adverse currency swings pose risks for Labcorp.In the past year, this Zacks Rank #2 (Buy) stock has risen 3.2% compared with 2.2% growth of the industry and a 23.3% increase of the S&P 500 Composite.The renowned healthcare diagnostics company has a market capitalization of $21.20 billion. Labcorp’s earnings yield of 6.9% is well ahead of the industry’s 4.3% yield. In the trailing four quarters, the company delivered an average earnings surprise of 3.31%.Let’s delve deeper.Tailwinds Supporting LH StockTargeted Development in High-Growth Areas: Labcorp’s continued expansion in faster-growing specialty testing areas, such as oncology, women’s health, autoimmune disease and neurology, is strengthening its growth profile. In the first quarter of 2026, Neurology delivered double-digit growth, driven by an expanded Alzheimer's testing portfolio. Oncology benefited from several newly launched liquid biopsy tests and wider availability of MRD solutions. The MRD portfolio includes the Plasma Detect ID for patients with stage I–III breast cancer or stage I–IIIA non-small cell lung cancer, as well as the Labcorp Plasma Detect Genome for stage III colon cancer, which is now available nationwide.Image Source: Zacks Investment ResearchThe integration of Invitae has further expanded the company’s reach in genetic testing solutions. Labcorp is also collaborating with Illumina to advance precision oncology through applications of next-generation sequencing (NGS) solutions across the healthcare ecosystem. The Labcorp OnDemand consumer health platform delivered double-digit growth in the first quarter, supported by its expanded offerings.Strategic Acquisitions and Partnerships to Drive Growth: In recent years, Labcorp has built a significant number of strategic relationships with health systems and regional/local laboratories, expanding its patient and provider network, and strengthening its presence in key markets. In the first quarter of 2026, enterprise revenues grew 5.8% year over year, with net acquisitions contributing 1.4%.Recent activities include the purchase of select assets of Crouse Health’s Laboratory Alliance of Central New York’s (Lab Alliance) laboratory business and an agreement to manage their daily inpatient lab operations. Labcorp also acquired select assets of New York-based Empire City Laboratories, became the first U.S. commercial laboratory with an agreement to implement Roche’s cobas Mass Spec solution, and signed a new multi-year partnership agreement with SOMOS.Focus on Operational Efficiency: The company continues to benefit from its launchpad initiatives, which target $100-$125 million in savings annually. In the first quarter of 2026, Labcorp expanded its collaboration with PathAI to deploy an FDA-cleared digital pathology platform across its national anatomic pathology labs and hospital lab partnerships. Together with Amazon Web Services and Datavant, the company is developing a new AI-powered real-world data platform to accelerate Alzheimer's research. More recently, Labcorp teamed up with Optum.ai to simplify laboratory operations by advancing AI.Across its core operations, AI and automation are already deployed in areas such as pathology, cytology and microbiology. Labcorp’s generative AI tool, Test Finder, is designed to simplify lab test selection and is also integrated into Labcorp Diagnostic Assistant.What Ails Labcorp?Macroeconomic Risks: Labcorp’s operations are heavily dependent on the demand for diagnostic testing and drug development services from patients, physicians, hospitals, medical device companies, and others. In recent times, volatilities in global economic conditions, including inflation, have significantly reduced the demand for these services, affecting the customers’ ability to pay and, consequently, the profitability of the company. Added to this, the escalation of the present geopolitical tensions and retaliatory tariffs is putting pressure on the supply chain and services, increasing the prices of offerings. In the first quarter of 2026, the cost of revenues went up 5.3% year over year.Exposed to Currency Headwind: Labcorp's huge exposure in international markets makes it vulnerable to currency fluctuations. With the recent upward trend observed in the value of the U.S. dollar, further acceleration expected by analysts in this value will cause the company’s revenues to face a tough situation overseas.LH Stock’s Estimate TrendThe Zacks Consensus Estimate for Labcorp’s 2026 earnings per share (EPS) has increased 1 cent to $18.00 in the past 30 days. The Zacks Consensus Estimate for the company’s 2026 revenues is pegged at $14.71 billion, implying 5.4% growth compared to the last year.Other Key PicksSome other top-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 with 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 39.2% against the industry’s 7.5% decline 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 dipped 9% against the industry’s 6.9% 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, 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 45.5% against the industry’s 7.4% decline over the past year.Beyond Nvidia: AI's Second Wave Is HereThe AI revolution has already minted millionaires. But the stocks everyone knows about aren't likely to keep delivering the biggest profits. AI’s second wave is moving from infrastructure to implementation and these companies are at the forefront of this transition, positioned to become what Amazon and Google were to the internet era.See Stocks Now >>This article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks