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What Is Quest Diagnostics Incorporated's (NYSE:DGX) Share Price Doing?

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·3 min read
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  • DGX

Quest Diagnostics Incorporated (NYSE:DGX) saw a decent share price growth in the teens level on the NYSE over the last few months. As a large-cap stock with high coverage by analysts, you could assume any recent changes in the company’s outlook is already priced into the stock. But what if there is still an opportunity to buy? Today I will analyse the most recent data on Quest Diagnostics’s outlook and valuation to see if the opportunity still exists.

See our latest analysis for Quest Diagnostics

What is Quest Diagnostics worth?

Great news for investors – Quest Diagnostics is still trading at a fairly cheap price. According to my valuation, the intrinsic value for the stock is $225.52, but it is currently trading at US$149 on the share market, meaning that there is still an opportunity to buy now. What’s more interesting is that, Quest Diagnostics’s share price is quite volatile, which gives us more chances to buy since the share price could sink lower (or rise higher) in the future. This is based on its high beta, which is a good indicator for how much the stock moves relative to the rest of the market.

What does the future of Quest Diagnostics look like?

earnings-and-revenue-growth
earnings-and-revenue-growth

Future outlook is an important aspect when you’re looking at buying a stock, especially if you are an investor looking for growth in your portfolio. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at the company's future expectations. However, with an extremely negative double-digit change in profit expected over the next couple of years, near-term growth is certainly not a driver of a buy decision. It seems like high uncertainty is on the cards for Quest Diagnostics, at least in the near future.

What this means for you:

Are you a shareholder? Although DGX is currently undervalued, the adverse prospect of negative growth brings about some degree of risk. Consider whether you want to increase your portfolio exposure to DGX, or whether diversifying into another stock may be a better move for your total risk and return.

Are you a potential investor? If you’ve been keeping an eye on DGX for a while, but hesitant on making the leap, I recommend you research further into the stock. Given its current undervaluation, now is a great time to make a decision. But keep in mind the risks that come with negative growth prospects in the future.

If you want to dive deeper into Quest Diagnostics, you'd also look into what risks it is currently facing. Every company has risks, and we've spotted 2 warning signs for Quest Diagnostics (of which 1 is significant!) you should know about.

If you are no longer interested in Quest Diagnostics, you can use our free platform to see our list of over 50 other stocks with a high growth potential.

This article by Simply Wall St is general in nature. We provide commentary 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. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.