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Quest Diagnostics (DGX) Gains As Market Dips: What You Should Know

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In the latest trading session, Quest Diagnostics (DGX - Free Report) closed at $123.16, marking a +0.9% move from the previous day. This move outpaced the S&P 500's daily loss of 0.44%. Meanwhile, the Dow lost 0.62%, and the Nasdaq, a tech-heavy index, added 0.5%.

Coming into today, shares of the medical laboratory operator had gained 0.58% in the past month. In that same time, the Medical sector gained 2.88%, while the S&P 500 gained 2.71%.

DGX will be looking to display strength as it nears its next earnings release. On that day, DGX is projected to report earnings of $3.47 per share, which would represent year-over-year growth of 107.78%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $2.65 billion, up 37.4% from the year-ago period.

DGX's full-year Zacks Consensus Estimates are calling for earnings of $10.07 per share and revenue of $9.09 billion. These results would represent year-over-year changes of +53.51% and +17.7%, respectively.

It is also important to note the recent changes to analyst estimates for DGX. These revisions help to show the ever-changing nature of near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about 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 has moved 0.78% higher within the past month. DGX currently has a Zacks Rank of #3 (Hold).

In terms of valuation, DGX is currently trading at a Forward P/E ratio of 12.13. Its industry sports an average Forward P/E of 34.85, so we one might conclude that DGX is trading at a discount comparatively.

Investors should also note that DGX has a PEG ratio of 1.34 right now. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. DGX's industry had an average PEG ratio of 2.84 as of yesterday's close.

The Medical - Outpatient and Home Healthcare industry is part of the Medical sector. This group has a Zacks Industry Rank of 116, putting it in the top 46% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. 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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