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Quest Diagnostics (DGX) Outpaces Stock Market Gains: What You Should Know

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Quest Diagnostics (DGX - Free Report) closed at $113.59 in the latest trading session, marking a +0.77% move from the prior day. This move outpaced the S&P 500's daily gain of 0.52%. Elsewhere, the Dow gained 0.01%, while the tech-heavy Nasdaq added 1.21%.

Heading into today, shares of the medical laboratory operator had lost 6.07% over the past month, lagging the Medical sector's of 0% and the S&P 500's gain of 0.49% 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 $3.60 per share, which would represent year-over-year growth of 104.55%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $2.74 billion, up 40.06% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $8.66 per share and revenue of $8.68 billion. These totals would mark changes of +32.01% and +12.29%, respectively, from last year.

Investors should also note any recent changes to analyst estimates for DGX. These revisions typically reflect the latest short-term business trends, which can change frequently. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Within the past 30 days, our consensus EPS projection has moved 1.75% higher. DGX is currently sporting a Zacks Rank of #3 (Hold).

In terms of valuation, DGX is currently trading at a Forward P/E ratio of 13.02. For comparison, its industry has an average Forward P/E of 38.52, which means DGX is trading at a discount to the group.

Meanwhile, DGX's PEG ratio is currently 0.76. 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. Medical - Outpatient and Home Healthcare stocks are, on average, holding a PEG ratio of 3.35 based on yesterday's closing prices.

The Medical - Outpatient and Home Healthcare industry is part of the Medical sector. This industry currently has a Zacks Industry Rank of 66, which puts it in the top 26% 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.

You can find more information on all of these metrics, and much more, on Zacks.com.


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