Quest Diagnostics (DGX) Has Fallen 4.2% Since Its Last Earnings Release: Is a Recovery Possible?

Quest Diagnostics: Recent Performance and Earnings Overview

Over the past month, Quest Diagnostics (DGX) shares have declined by approximately 4.2%, trailing behind the S&P 500 index.

As the company approaches its next earnings announcement, investors are watching closely to see if this downward trend will persist or if a rebound is on the horizon. To better understand the current situation, let's review the latest quarterly results and key financial highlights.

Fourth Quarter Results Surpass Expectations

In the fourth quarter of 2025, Quest Diagnostics reported adjusted earnings per share (EPS) of $2.42, exceeding the Zacks Consensus Estimate by 2.85% and improving 8.5% over the same period last year. These adjusted results exclude certain one-off items, such as amortization, restructuring, integration costs, and tax benefits from stock-based compensation. On a GAAP basis, EPS reached $2.18, marking an 11.8% year-over-year increase.

For the full year 2025, adjusted EPS stood at $9.85, up 10.3% from the previous year and slightly above consensus projections by 0.5%.

Revenue Growth Details

Fourth-quarter revenue climbed 7.1% year over year to $2.81 billion, beating analyst expectations by 2.08%. The Diagnostic Information Services segment contributed $2.74 billion, a 7.3% increase from the prior year.

• Test volumes (measured by requisitions) rose 8.5% year over year in Q4.
• Revenue per requisition dipped slightly by 0.1%.

For the entire year, total revenue reached $11.04 billion, representing an 11.8% increase and surpassing estimates by 1%. Following the earnings release, DGX shares saw a nearly 2% uptick in pre-market trading.

Margins and Expenses

Service costs for the quarter totaled $1.90 billion, up 7.5% from the previous year. Gross profit reached $910 million, a 6.1% increase, though gross margin narrowed by 30 basis points to 32.4%.

Selling, general, and administrative (SG&A) expenses were $504 million, up 8.2% year over year. The adjusted operating margin came in at 14.5%, a decrease of 49 basis points compared to the prior year.

Financial Position Update

At the close of Q4 2025, Quest Diagnostics held $420 million in cash and equivalents, down from $549 million at the end of 2024. Net cash from operating activities totaled $1.89 billion, up from $1.33 billion a year earlier. The company boasts a five-year annualized dividend growth rate of 6.88%.

2026 Outlook

For the full year 2026, Quest Diagnostics anticipates revenue between $11.70 billion and $11.82 billion, signaling a 6–7.1% year-over-year increase. The Zacks Consensus Estimate stands at $11.35 billion. Adjusted EPS is projected to range from $10.50 to $10.70, compared to the consensus estimate of $10.45.

Recent Estimate Revisions

Analyst estimates for Quest Diagnostics have generally trended higher over the past month, reflecting growing optimism about the company's prospects.

VGM Score Breakdown

Quest Diagnostics currently holds a Growth Score of B and an even stronger Momentum Score of A. Its Value Score is also B, placing it among the top 40% of value-oriented stocks. The overall VGM (Value, Growth, Momentum) Score is A, making it an attractive option for investors seeking a balanced approach.

Future Prospects

With estimates moving upward, the outlook for Quest Diagnostics appears positive. The stock carries a Zacks Rank #3 (Hold), suggesting it is expected to perform in line with the broader market in the coming months.

Industry Comparison: DaVita HealthCare

Within the same industry, DaVita HealthCare (DVA) has seen its stock rise 7.3% over the past month. The company recently reported quarterly revenue of $3.62 billion, up 9.9% year over year, and EPS of $3.40, compared to $2.24 a year earlier.

• DaVita is projected to earn $2.41 per share in the current quarter, a 20.5% increase from the prior year.
• The Zacks Consensus Estimate for DaVita has remained steady over the last 30 days.
• DaVita holds a Zacks Rank #2 (Buy) and a VGM Score of A.

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