# Quest Diagnostics (DGX.US)

Canonical: https://gigainvestors.com/s/DGX

Analysis as of: 2026-10-16T07:27:59.958Z. Financial observations: FY1996–FY2025.

Listing currency: USD. Reporting currency: USD.

## Verdict

A wonderful business at too high a price

Quality tests for Buy: pass (profit record: pass; earnings resilience is evidence only). Published buy qualification: no.

Share price: $239.15 per share; close as of 2026-10-15.

Estimated value: low $113.08 per share, central $128.18 per share, high $148.28 per share. Buy at or below the central value $128.18 per share. Valuation as of 2026-10-16T07:27:59.958Z; scenarios are not confidence intervals.

Expected annual return: 6.6% at the stated quote. About 6.6% a year at today's price (required return 10.0%). required return 10.0% a year (10% floor; US 10-year bond 5.1% + 4 points).

## Checklist

### understandable: pass

- 3 revenue declines in the last 10 years (informational)

- Financial history: 10 years

- Years with declining revenue: 3

- Years with a net loss: 0

- Operating margin variation: 0.17×

Chart: Operating margin; fiscal year observations.

- FY2016: 0.17×

- FY2017: 0.15×

- FY2018: 0.15×

- FY2019: 0.16×

- FY2020: 0.21×

- FY2021: 0.22×

- FY2022: 0.14×

- FY2023: 0.14×

- FY2024: 0.14×

- FY2025: 0.15×

### moat: pass

- ROIC, median of available years: 37.1%

- ROIC, second-lowest year: 26.1%

- Typical minus recent gross margin: 2.8 pp

- Typical gross margin (annual median): 34.8%

- Recent gross margin (lower of latest and 3-year median): 31.9%

- Years with nonpositive capital: 0

- Capital spending / revenue: 4.4%

- ROIC including acquisitions, ten-year median: 8.0%

Chart: ROIC excluding acquisitions; fiscal year observations.

- FY2016: 41.4%

- FY2017: 38.7%

- FY2018: 35.3%

- FY2019: 29.7%

- FY2020: 42.7%

- FY2021: 56.9%

- FY2022: 36.9%

- FY2023: 37.3%

- FY2024: 23.3%

- FY2025: 26.1%

### economics: pass

- Owner earnings / net income, 5-yr: 1.03×

- Cash conversion uses consolidated totals: No

- Owner earnings, five-year total: $5.8B

- Net income, five-year total: $5.7B

- Return on incremental invested capital: >100%

- Working capital / revenue, annual change: -0.5 pp

- Working capital / revenue, change between three-year averages: -2.9 pp

- Working capital / revenue, final three-year average: 7.7%

Chart: Annual owner cash / profit; fiscal year observations.

- FY2021: 1.00×

- FY2022: 1.03×

- FY2023: 1.04×

- FY2024: 1.08×

- FY2025: 1.04×

### management: pass

- Historical market-dollar context (not the management verdict): 2016 to 2025 (9 years)

- buybacks leaned toward cheaper years (informational)

- ROIC first 3 years vs last 3 years: 38.7% vs 26.1%

- Per-share earnings: 4.89 to 7.71 (three-year endpoint medians)

- Management verdict uses per-share economic progress: Yes

- Ordinary dilution, 10-year annual growth: -2.5%

- Ordinary dilution, 5-year annual growth: -3.6%

- Market cap gain: $6.6B

- Cumulative retained earnings: $3.4B

- Diluted shares, 10-year annual growth: -2.5%

- Diluted shares, 5-year annual growth: -3.6%

- $1 test, starting fiscal year: FY2016

- $1 test, ending fiscal year: FY2025

- Per-share value growth: 5.9%

- Per-share value change: $2.82

- Per-share value, starting three-year median: $4.89

- Per-share value, ending three-year median: $7.71

- Buybacks concentrated in cheaper years (correlation): 0.18

- Average buyback yield: 3.8%

- Buyback history: 10 years

- Debt-funded buybacks: No

- Acquisition spending: $3.8B

- Cumulative net income, 10 years: $10B

- ROIC, first three-year median: 38.7%

- ROIC, last three-year median: 26.1%

Chart: Earnings per share; fiscal year observations.

- FY2016: $4.54

- FY2017: $5.51

- FY2018: $5.29

- FY2019: $6.31

- FY2020: $10.52

- FY2021: $15.59

- FY2022: $8.02

- FY2023: $7.56

- FY2024: $7.71

- FY2025: $8.78

### accounting: pass

- Sloan accruals: -5.5%

- Receivables to sales index (DSRI): 0.97×

- Restructuring years, last five: 0

- Stock compensation / operating cash flow: 4.7%

- Earnings backed by cash: Yes

- Operating cash / earnings: 1.90×

- Accounting red flags: 0

- Goodwill and intangibles / equity: 1.48×

Chart: Sloan accruals; fiscal year observations.

- FY2016: -4.2%

- FY2017: -3.8%

- FY2018: -4.2%

- FY2019: -3.0%

- FY2020: -4.1%

- FY2021: -1.7%

- FY2022: -6.0%

- FY2023: -3.0%

- FY2024: -2.9%

- FY2025: -5.5%

## Holders

- [Christopher Davis](https://gigainvestors.com/DAV): tracked 13F investor; follow the investor page for holding quarter and amounts.

- [Matthew McLennan](https://gigainvestors.com/FE): tracked 13F investor; follow the investor page for holding quarter and amounts.

## Price story

Price needs cash profits to grow 8.9% a year for ten years · sales +11.8%

Story as of 2026-10-16T09:58:37.977Z; price observation 2026-10-15.

Price needs cash profits to grow 8.9% a year for ten years

- 2025-04-22: Quest beats quarterly profit estimates on strong demand for diagnostic tests ([ca.finance.yahoo.com](https://ca.finance.yahoo.com/news/quest-beats-quarterly-profit-estimates-113658194.html))

- 2026-02-11: DGX Q4 Deep Dive: Consumer Testing and Advanced Diagnostics Fuel Growth Amid Margin Headwinds ([finance.yahoo.com](https://finance.yahoo.com/news/dgx-q4-deep-dive-consumer-053223672.html))

- 2026-06-25: DGX's Stock Rises on Haystack MRD Test's Approval From NYSDOH ([finance.yahoo.com](https://finance.yahoo.com/healthcare/articles/dgxs-stock-rises-haystack-mrd-142600345.html))

- 2026-07-26: Why Quest Diagnostics (DGX) Is Up 8.2% After Raising 2026 Guidance And Boosting Buybacks ([finance.yahoo.com](https://finance.yahoo.com/markets/stocks/articles/why-quest-diagnostics-dgx-8-041726532.html))

- 2026-08-03: Quest Diagnostics Raises 2026 Outlook as Testing Demand Accelerates ([finance.yahoo.com](https://finance.yahoo.com/healthcare/articles/quest-diagnostics-raises-2026-outlook-143700319.html))

### Sales · FY2024–2025

sales +11.8%; source https://www.sec.gov/Archives/edgar/data/1022079/000102207926000015/dgx-20251231.htm; observed 2026-02-26.

- FY2016: $7.5B 

- FY2017: $7.7B 

- FY2018: $7.5B 

- FY2019: $7.7B 

- FY2020: $9.4B 

- FY2021: $11B 

- FY2022: $9.9B 

- FY2023: $9.3B 

- FY2024: $9.9B 

- FY2025: $11B 

### Gross margin · FY2025

gross margin 31.9%; source https://www.sec.gov/Archives/edgar/data/1022079/000102207926000015/dgx-20251231.htm; observed 2026-02-26.

- FY2016: 38.6% 

- FY2017: 38.8% 

- FY2018: 34.6% 

- FY2019: 34.8% 

- FY2020: 38.5% 

- FY2021: 39.0% 

- FY2022: 34.7% 

- FY2023: 33.0% 

- FY2024: 32.9% 

- FY2025: 31.9% 

## Owner memo

Memo as of 2026-10-16T08:06:05.509Z.

### How it makes money

Operates in diagnostics & research; annual sales are USD 11 billion.

- Source: https://www.sec.gov/Archives/edgar/data/1022079/000102207926000015/dgx-20251231.htm (filed 2026-02-26); FY2025: revenue 11035000000; grossProfit 3523000000; margin = grossProfit / revenue.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16); DGX.US: Quest Diagnostics Incorporated provides diagnostic testing and services in the United States. The company develops and delivers diagnostic information services, such as routine, non-routine and advanced clinical testing, anatomic pathology testing, and other diagnostic information services. It also provides services under the Quest Diagnostics brand, as well as under the AmeriPath, Dermpath Diagnostics, ExamOne, and Quanum brands to physicians, hospitals, patients and consumers, health plans, government agencies, employers, retailers, pharmaceutical companies and insurers commercial clinical laboratories, and accountable care organizations through a network of laboratories, patient service centers, phlebotomists in physician offices, call centers and mobile phlebotomists, nurses, and other health and wellness professionals. In addition, the company offers risk assessment services for the life insurance industry; healthcare IT healthcare providers and payers; testing and medical director services at hospital laboratories; test offerings in cardiometabolic and endocrine; cancer; clinical drug monitoring and toxicology; infectious disease, including autoimmune; neurology diagnostics, including Alzheimer's disease; and women's health, such as prenatal genetic; workplace drug testing, testing urine, hair, and oral fluid specimens services; and employer population health services, including biometric screenings, flu shots, and related preventative services. Further, it provides population health solutions; extended care services; develops in vitro diagnostic tests; laboratory diagnostic information and digital health connectivity systems; underwriting support services, including data gathering, paramedical examinations, and clinical laboratory testing and analytics; and national specimen collection and health data solutions. Quest Diagnostics Incorporated was founded in 1967 and is headquartered in Secaucus, New Jersey.

### Why customers stay

Margins ranged from 31.9% to 33% during 2023–25; it earns 37.1% on its capital.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-26); FY2023: grossProfit / revenue = 33%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-26); FY2024: grossProfit / revenue = 32.9%.

- Source: https://www.sec.gov/Archives/edgar/data/1022079/000102207926000015/dgx-20251231.htm (filed 2026-02-26); FY2025: grossProfit / revenue = 31.9%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-26); 10-year return on capital observations [[2016,0.41440339490763856],[2017,0.38733186690938515],[2018,0.3525726391470189],[2019,0.29656053019834583],[2020,0.42652212551883756],[2021,0.5692342174075458],[2022,0.36889476641907737],[2023,0.3727111636148848],[2024,0.23279063478829126],[2025,0.26098551825471933]]; median 0.37080296501698107. ROIC follows the displayed moat series; financial companies use return on tangible equity.

### Where the cash goes

Paid dividends in 10 of 10 years; bought back USD 450 million of shares.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-26); FY2016: growth capex 2643909.6159656644; upkeep 290356090.38403434; owner earnings 603643909.6159656. Growth capex / owner earnings = 0.0043799159965810025.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-26); FY2017: growth capex 0; upkeep 252000000; owner earnings 790000000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-26); FY2018: growth capex 0; upkeep 383000000; owner earnings 662000000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-26); FY2019: growth capex 32566615.593893945; upkeep 367433384.40610605; owner earnings 819566615.593894. Growth capex / owner earnings = 0.03973638624884048.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-26); FY2020: growth capex 57000000; upkeep 361000000; owner earnings 1431000000. Growth capex / owner earnings = 0.039832285115303984.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-26); FY2021: growth capex 0; upkeep 403000000; owner earnings 2000000000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-26); FY2022: growth capex 0; upkeep 404000000; owner earnings 979000000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-26); FY2023: growth capex 0; upkeep 408000000; owner earnings 885000000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-26); FY2024: growth capex 0; upkeep 425000000; owner earnings 939000000. Growth capex / owner earnings = 0.

- Source: https://www.sec.gov/Archives/edgar/data/1022079/000102207926000015/dgx-20251231.htm (filed 2026-02-26); FY2025: growth capex 0; upkeep 527000000; owner earnings 1035000000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-26); Dividend observations: [[2016,223000000],[2017,247000000],[2018,266000000],[2019,286000000],[2020,297000000],[2021,309000000],[2022,305000000],[2023,314000000],[2024,331000000],[2025,353000000]]. Zero only counted when supported by a complete cash-flow statement.

- Source: https://www.sec.gov/Archives/edgar/data/1022079/000102207926000015/dgx-20251231.htm (filed 2026-02-26); FY2025: cash repurchases 450000000 USD.

### Are managers owners

Insiders own 0.4% of the company.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16); DGX.US SharesStats.PercentInsiders = 0.43299999999999994 percentage points; cache date 2026-10-16.

### What could break it

"Our outstanding debt may impair our financial and operating flexibility." (SEC filing, Feb 2026)

- Source: https://www.sec.gov/Archives/edgar/data/1022079/000102207926000015/dgx-20251231.htm (filed 2026-02-26); Our outstanding debt may impair our financial and operating flexibility.

### What the price says

The price assumes cash profits grow 8.9% yearly over ten years; actual growth was 5.9%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-26); Ten-year compound average after fade. Initial solved rate 0.114892317709825. Price 239.15; FX 1; discount 0.1; same standard ten-year fade to terminal 0.03. FY2015 owner earnings/share 5.172413793103448 → FY2025 9.15929203539823. Closing-price date 2026-10-15.

## Monthly share-price history (USD per share)

- 2016-10: $81.44 per share

- 2016-11: $87.46 per share

- 2016-12: $91.90 per share

- 2017-01: $91.92 per share

- 2017-02: $97.44 per share

- 2017-03: $98.19 per share

- 2017-04: $105.51 per share

- 2017-05: $108.77 per share

- 2017-06: $111.16 per share

- 2017-07: $108.31 per share

- 2017-08: $108.35 per share

- 2017-09: $93.64 per share

- 2017-10: $93.78 per share

- 2017-11: $98.46 per share

- 2017-12: $98.49 per share

- 2018-01: $105.82 per share

- 2018-02: $103.05 per share

- 2018-03: $100.30 per share

- 2018-04: $101.20 per share

- 2018-05: $106.53 per share

- 2018-06: $109.94 per share

- 2018-07: $107.72 per share

- 2018-08: $109.98 per share

- 2018-09: $107.91 per share

- 2018-10: $94.11 per share

- 2018-11: $88.57 per share

- 2018-12: $83.27 per share

- 2019-01: $87.35 per share

- 2019-02: $86.55 per share

- 2019-03: $89.92 per share

- 2019-04: $96.38 per share

- 2019-05: $95.91 per share

- 2019-06: $101.81 per share

- 2019-07: $102.08 per share

- 2019-08: $102.37 per share

- 2019-09: $107.03 per share

- 2019-10: $101.25 per share

- 2019-11: $106.55 per share

- 2019-12: $106.79 per share

- 2020-01: $110.67 per share

- 2020-02: $106.06 per share

- 2020-03: $80.30 per share

- 2020-04: $110.11 per share

- 2020-05: $118.28 per share

- 2020-06: $113.96 per share

- 2020-07: $127.07 per share

- 2020-08: $111.24 per share

- 2020-09: $114.49 per share

- 2020-10: $122.14 per share

- 2020-11: $123.98 per share

- 2020-12: $119.17 per share

- 2021-01: $129.15 per share

- 2021-02: $115.59 per share

- 2021-03: $128.34 per share

- 2021-04: $131.88 per share

- 2021-05: $131.67 per share

- 2021-06: $131.97 per share

- 2021-07: $141.80 per share

- 2021-08: $152.83 per share

- 2021-09: $145.31 per share

- 2021-10: $146.78 per share

- 2021-11: $148.68 per share

- 2021-12: $173.01 per share

- 2022-01: $135.02 per share

- 2022-02: $131.27 per share

- 2022-03: $136.86 per share

- 2022-04: $133.84 per share

- 2022-05: $141.02 per share

- 2022-06: $132.98 per share

- 2022-07: $136.57 per share

- 2022-08: $125.31 per share

- 2022-09: $122.69 per share

- 2022-10: $143.65 per share

- 2022-11: $151.83 per share

- 2022-12: $156.44 per share

- 2023-01: $148.48 per share

- 2023-02: $138.36 per share

- 2023-03: $141.48 per share

- 2023-04: $138.81 per share

- 2023-05: $132.65 per share

- 2023-06: $140.56 per share

- 2023-07: $135.21 per share

- 2023-08: $131.50 per share

- 2023-09: $121.86 per share

- 2023-10: $130.10 per share

- 2023-11: $137.23 per share

- 2023-12: $137.88 per share

- 2024-01: $128.43 per share

- 2024-02: $124.89 per share

- 2024-03: $133.11 per share

- 2024-04: $138.18 per share

- 2024-05: $141.97 per share

- 2024-06: $136.88 per share

- 2024-07: $142.30 per share

- 2024-08: $156.97 per share

- 2024-09: $155.25 per share

- 2024-10: $154.83 per share

- 2024-11: $162.66 per share

- 2024-12: $150.86 per share

- 2025-01: $163.10 per share

- 2025-02: $172.90 per share

- 2025-03: $169.20 per share

- 2025-04: $178.22 per share

- 2025-05: $173.34 per share

- 2025-06: $179.63 per share

- 2025-07: $167.41 per share

- 2025-08: $181.64 per share

- 2025-09: $190.58 per share

- 2025-10: $175.95 per share

- 2025-11: $189.18 per share

- 2025-12: $173.53 per share

- 2026-01: $187.03 per share

- 2026-02: $211.91 per share

- 2026-03: $195.98 per share

- 2026-04: $194.20 per share

- 2026-05: $194.90 per share

- 2026-06: $211.95 per share

- 2026-07: $233.01 per share

- 2026-08: $240.30 per share

- 2026-09: $233.07 per share

- 2026-10: $239.15 per share

## Annual estimated value (USD per share)

- FY2016: low $53.19 per share, central $60.32 per share, high $69.82 per share

- FY2017: low $60.24 per share, central $68.55 per share, high $79.61 per share

- FY2018: low $52.06 per share, central $59.23 per share, high $68.79 per share

- FY2019: low $71.40 per share, central $82.19 per share, high $94.35 per share

- FY2020: low $90.89 per share, central $110.25 per share, high $127.39 per share

- FY2021: low $112.76 per share, central $140.68 per share, high $163.40 per share

- FY2022: low $107.32 per share, central $134.08 per share, high $156.33 per share

- FY2023: low $99.37 per share, central $112.46 per share, high $129.88 per share

- FY2024: low $97.70 per share, central $110.74 per share, high $128.11 per share

- FY2025: low $103.87 per share, central $117.94 per share, high $136.68 per share

Historical values use today's bond yield for every fiscal year

Historical values use today's FX rate into trading currency for every fiscal year

Historical values use current restated fundamentals and current commodity classification; they are not point-in-time estimates

## Sources

[Original 10-K filing](https://www.sec.gov/Archives/edgar/data/1022079/000102207926000015/dgx-20251231.htm); period 2025-12-31, filed 2026-02-26.

Estimates depend on assumptions and are not guarantees or investment advice. Underlying data remains subject to its source licenses; public reading does not grant bulk redistribution rights.