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Quest Diagnostics (DGX) Gains As Market Dips: What You Should Know

Zacks Equity Research
·3 min read

In the latest trading session, Quest Diagnostics (DGX) closed at $120.85, marking a +0.41% move from the previous day. The stock outpaced the S&P 500's daily loss of 0.39%. At the same time, the Dow added 0.12%, and the tech-heavy Nasdaq lost 0.1%.

Prior to today's trading, shares of the medical laboratory operator had lost 1.99% over the past month. This has lagged the Medical sector's gain of 5.94% and the S&P 500's gain of 4.06% in that time.

DGX will be looking to display strength as it nears its next earnings release. In that report, analysts expect DGX to post earnings of $3.90 per share. This would mark year-over-year growth of 133.53%. Meanwhile, our latest consensus estimate is calling for revenue of $2.83 billion, up 47.14% from the prior-year quarter.

DGX's full-year Zacks Consensus Estimates are calling for earnings of $10.71 per share and revenue of $9.39 billion. These results would represent year-over-year changes of +63.26% and +21.58%, respectively.

It is also important to note the recent changes to analyst estimates for DGX. These revisions typically reflect the latest short-term business trends, which can change frequently. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 11.13% higher within the past month. DGX is holding a Zacks Rank of #3 (Hold) right now.

Investors should also note DGX's current valuation metrics, including its Forward P/E ratio of 11.24. This represents a discount compared to its industry's average Forward P/E of 38.3.

We can also see that DGX currently has a PEG ratio of 0.42. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. The Medical - Outpatient and Home Healthcare industry currently had an average PEG ratio of 3.09 as of yesterday's close.

The Medical - Outpatient and Home Healthcare industry is part of the Medical sector. This industry currently has a Zacks Industry Rank of 113, which puts it in the top 45% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

To follow DGX in the coming trading sessions, be sure to utilize Zacks.com.

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