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Quest Diagnostics (DGX) Gains But Lags Market: What You Should Know

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Quest Diagnostics (DGX - Free Report) closed at $110.69 in the latest trading session, marking a +0.95% move from the prior day. The stock lagged the S&P 500's daily gain of 1.54%. Elsewhere, the Dow gained 1.59%, while the tech-heavy Nasdaq added 0.98%.

Heading into today, shares of the medical laboratory operator had lost 14.4% over the past month, lagging the Medical sector's gain of 0.98% and the S&P 500's gain of 8% in that time.

DGX will be looking to display strength as it nears its next earnings release. On that day, DGX is projected to report earnings of $3.43 per share, which would represent year-over-year growth of 94.89%. Meanwhile, our latest consensus estimate is calling for revenue of $2.59 billion, up 32.39% from the prior-year quarter.

For the full year, our Zacks Consensus Estimates are projecting earnings of $8.40 per share and revenue of $8.71 billion, which would represent changes of +28.05% and +12.8%, respectively, from the prior year.

Investors might also notice recent changes to analyst estimates for DGX. These revisions help to show the ever-changing nature of near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, 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 remained stagnant within the past month. DGX is currently a Zacks Rank #3 (Hold).

Investors should also note DGX's current valuation metrics, including its Forward P/E ratio of 13.05. For comparison, its industry has an average Forward P/E of 40.37, which means DGX is trading at a discount to the group.

It is also worth noting that DGX currently has a PEG ratio of 0.83. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. The Medical - Outpatient and Home Healthcare industry currently had an average PEG ratio of 3.42 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 51, which puts it in the top 21% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

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