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Should Labcorp Stock Stay in Your Portfolio Right Now?
Read MoreHide Full Article
Key Takeaways
LH is expanding in high-growth specialty testing areas like oncology and neurology to drive future revenues.
LH spent $268M on acquisitions and partnerships, with deals adding 2.2% to top-line growth in Q3.
LH faces risks from macroeconomic volatility and a stronger U.S. dollar impacting overseas revenues.
Labcorp Holdings Inc. (LH - Free Report) , or Labcorp, is well-poised to grow in the coming quarters due to its strong, consistent performance in high-growth areas. In recent years, the company has built a significant number of strategic relationships with health systems and regional/local laboratories, expanding its patient and provider network, and strengthening its presence in important markets. Disciplined cost management is also another positive factor. Meanwhile, macroeconomic volatilities and adverse currency fluctuations may hurt its growth.
In the past year, this Zacks Rank #3 (Hold) stock has rallied 10.1% compared with the 5.2% growth of the industry. Meanwhile, the S&P 500 composite has risen 16.9% in the same time frame.
The renowned healthcare diagnostics company has a market capitalization of $20.86 billion. Labcorp’s earnings yield of 7% favorably compares with the industry’s 4.1% yield. In the trailing four quarters, the company delivered an average earnings surprise of 2.7%.
Let’s delve deeper.
Tailwinds for Labcorp
Targeted Development in High-Growth Areas: Labcorp continues to expand its business in specialty testing areas such as oncology, women’s health, autoimmune disease and neurology, which are expected to grow up to three times faster than other therapeutic areas. In the third quarter of 2025, the company strengthened its oncology and genetic testing portfolio by extending OmniSeq INSIGHT to evaluate ovarian tumors for homologous recombination deficiency (HRD). PGDx elio tissue complete became the first test of its kind to receive CE marking under the European Union's In Vitro Diagnostic Regulation.
Image Source: Zacks Investment Research
Labcorp expanded its neurology capabilities with two new Alzheimer's tests for specialty and primary care settings. In addition, the Labcorp OnDemand channel maintained strong momentum, having launched several consumer-initiated tests during the quarter, including tests for lead exposure, ApoB for heart health and a panel for healthy aging. Another launch, the Labcorp Whole Health Solutions, supports the growing needs of functional medicine, integrative medicine and primary care providers in delivering holistic care.
Strategic Acquisitions and Partnerships to Drive Growth: In the third quarter, the company invested $268 million in acquisitions and partnerships, with acquisitions contributing 2.2% to top-line growth. Labcorp signed agreements to acquire select assets of Laboratory Alliance of Central New York and Empire City Laboratories, as well as with Crouse Health to manage their inpatient labs. Labcorp also completed the acquisition of select oncology and clinical testing assets from BioReference Health, a wholly owned subsidiary of OPKO Health.
In July, Labcorp agreed to acquire select assets of the ambulatory outreach laboratory services of Community Health Systems, one of the largest health care companies in the United States, across 13 states. The transaction is expected to close by the year-end. This year, Labcorp also extended its long-term agreement with UHealth, the University of Miami Health System, and acquired key clinical and anatomic pathology assets from Incyte Diagnostics in the Pacific Northwest. The Invitae acquisition in 2024 extended Labcorp’s capabilities in genetic testing solutions for oncology and select rare diseases.
Focus on Operational Efficiency: Labcorp is focused on enhancing customer and employee experiences and leveraging technology to drive ongoing operational and process efficiencies. In 2021, the company launched its business process improvement initiative, LaunchPad, which achieved the targeted savings of $350 million by the end of 2024. Labcorp continues to focus on driving about $100-$125 million in annual savings under this initiative through facility and workforce optimization, technology upgrades, acquisition integration and process redesign.
The company also implemented other operational efficiencies to improve margins, such as the Labcorp Diagnostic Assistant and eClaim Assist. In the third quarter, it launched Labcorp Test Finder, a generative AI tool developed with Amazon Web Services, to improve test selection for providers and health systems.
Factors Weighing on LH
Macroeconomic Risks: Labcorp’s operations are heavily dependent on the demand for diagnostic testing and drug development services from patients, physicians, hospitals, medical device companies and others. In recent times, volatilities in global economic conditions, including inflation, have significantly reduced the demand for these services, affecting customers’ ability to pay and, consequently, the profitability of the company. Added to this, the escalation of the present geopolitical tensions and retaliatory tariffs is putting pressure on the supply chain and services, increasing the prices of offerings.
Exposed to Currency Headwind: Labcorp's huge exposure in international markets makes it vulnerable to currency fluctuations. With the recent upward trend observed in the value of the U.S. dollar, further acceleration expected by analysts in this value will cause the company’s revenues to face a tough situation overseas.
LH Stock Estimate Trend
In the past 30 days, the Zacks Consensus Estimate for Labcorp’s 2025 earnings has remained constant at $16.33.
The Zacks Consensus Estimate for 2025 revenues is pegged at $13.9 billion, suggesting a 7.6% improvement from the 2024 comparable figure.
Top MedTech Stocks
Some better-ranked stocks in the broader medical space are Phibro Animal Health (PAHC - Free Report) , BrightSpring Health Services (BTSG - Free Report) and Quest Diagnostics (DGX - Free Report) .
Phibro Animal Healthhas an earnings yield of 7.4% compared with the industry’s 0.2% yield. Shares of the company have surged 86.2% in the past year against the industry’s 5% fall. PAHC’s earnings outpaced estimates in three of the trailing four quarters and missed on one occasion, the average surprise being 20.8%.
BrightSpring Health Services, carrying a Zacks Rank #2 (Buy),has an estimated long-term earnings growth rate of 53.3% compared with the industry’s 15.5% growth. Its earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, with the average surprise being 45.1%. BTSG shares have surged 130.2% compared with the industry’s 5.2% growth in the past year.
Quest Diagnostics, carrying a Zacks Rank #2, has an earnings yield of 5.6% compared with the industry’s 5% yield. Shares of the company have jumped 13.9% compared with the industry’s 5.2% growth. DGX’s earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 2.5%.
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Should Labcorp Stock Stay in Your Portfolio Right Now?
Key Takeaways
Labcorp Holdings Inc. (LH - Free Report) , or Labcorp, is well-poised to grow in the coming quarters due to its strong, consistent performance in high-growth areas. In recent years, the company has built a significant number of strategic relationships with health systems and regional/local laboratories, expanding its patient and provider network, and strengthening its presence in important markets. Disciplined cost management is also another positive factor. Meanwhile, macroeconomic volatilities and adverse currency fluctuations may hurt its growth.
In the past year, this Zacks Rank #3 (Hold) stock has rallied 10.1% compared with the 5.2% growth of the industry. Meanwhile, the S&P 500 composite has risen 16.9% in the same time frame.
The renowned healthcare diagnostics company has a market capitalization of $20.86 billion. Labcorp’s earnings yield of 7% favorably compares with the industry’s 4.1% yield. In the trailing four quarters, the company delivered an average earnings surprise of 2.7%.
Let’s delve deeper.
Tailwinds for Labcorp
Targeted Development in High-Growth Areas: Labcorp continues to expand its business in specialty testing areas such as oncology, women’s health, autoimmune disease and neurology, which are expected to grow up to three times faster than other therapeutic areas. In the third quarter of 2025, the company strengthened its oncology and genetic testing portfolio by extending OmniSeq INSIGHT to evaluate ovarian tumors for homologous recombination deficiency (HRD). PGDx elio tissue complete became the first test of its kind to receive CE marking under the European Union's In Vitro Diagnostic Regulation.
Image Source: Zacks Investment Research
Labcorp expanded its neurology capabilities with two new Alzheimer's tests for specialty and primary care settings. In addition, the Labcorp OnDemand channel maintained strong momentum, having launched several consumer-initiated tests during the quarter, including tests for lead exposure, ApoB for heart health and a panel for healthy aging. Another launch, the Labcorp Whole Health Solutions, supports the growing needs of functional medicine, integrative medicine and primary care providers in delivering holistic care.
Strategic Acquisitions and Partnerships to Drive Growth: In the third quarter, the company invested $268 million in acquisitions and partnerships, with acquisitions contributing 2.2% to top-line growth. Labcorp signed agreements to acquire select assets of Laboratory Alliance of Central New York and Empire City Laboratories, as well as with Crouse Health to manage their inpatient labs. Labcorp also completed the acquisition of select oncology and clinical testing assets from BioReference Health, a wholly owned subsidiary of OPKO Health.
In July, Labcorp agreed to acquire select assets of the ambulatory outreach laboratory services of Community Health Systems, one of the largest health care companies in the United States, across 13 states. The transaction is expected to close by the year-end. This year, Labcorp also extended its long-term agreement with UHealth, the University of Miami Health System, and acquired key clinical and anatomic pathology assets from Incyte Diagnostics in the Pacific Northwest. The Invitae acquisition in 2024 extended Labcorp’s capabilities in genetic testing solutions for oncology and select rare diseases.
Focus on Operational Efficiency: Labcorp is focused on enhancing customer and employee experiences and leveraging technology to drive ongoing operational and process efficiencies. In 2021, the company launched its business process improvement initiative, LaunchPad, which achieved the targeted savings of $350 million by the end of 2024. Labcorp continues to focus on driving about $100-$125 million in annual savings under this initiative through facility and workforce optimization, technology upgrades, acquisition integration and process redesign.
The company also implemented other operational efficiencies to improve margins, such as the Labcorp Diagnostic Assistant and eClaim Assist. In the third quarter, it launched Labcorp Test Finder, a generative AI tool developed with Amazon Web Services, to improve test selection for providers and health systems.
Factors Weighing on LH
Macroeconomic Risks: Labcorp’s operations are heavily dependent on the demand for diagnostic testing and drug development services from patients, physicians, hospitals, medical device companies and others. In recent times, volatilities in global economic conditions, including inflation, have significantly reduced the demand for these services, affecting customers’ ability to pay and, consequently, the profitability of the company. Added to this, the escalation of the present geopolitical tensions and retaliatory tariffs is putting pressure on the supply chain and services, increasing the prices of offerings.
Exposed to Currency Headwind: Labcorp's huge exposure in international markets makes it vulnerable to currency fluctuations. With the recent upward trend observed in the value of the U.S. dollar, further acceleration expected by analysts in this value will cause the company’s revenues to face a tough situation overseas.
LH Stock Estimate Trend
In the past 30 days, the Zacks Consensus Estimate for Labcorp’s 2025 earnings has remained constant at $16.33.
The Zacks Consensus Estimate for 2025 revenues is pegged at $13.9 billion, suggesting a 7.6% improvement from the 2024 comparable figure.
Top MedTech Stocks
Some better-ranked stocks in the broader medical space are Phibro Animal Health (PAHC - Free Report) , BrightSpring Health Services (BTSG - Free Report) and Quest Diagnostics (DGX - Free Report) .
Phibro Animal Healthhas an earnings yield of 7.4% compared with the industry’s 0.2% yield. Shares of the company have surged 86.2% in the past year against the industry’s 5% fall. PAHC’s earnings outpaced estimates in three of the trailing four quarters and missed on one occasion, the average surprise being 20.8%.
PAHC sports a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
BrightSpring Health Services, carrying a Zacks Rank #2 (Buy),has an estimated long-term earnings growth rate of 53.3% compared with the industry’s 15.5% growth. Its earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, with the average surprise being 45.1%. BTSG shares have surged 130.2% compared with the industry’s 5.2% growth in the past year.
Quest Diagnostics, carrying a Zacks Rank #2, has an earnings yield of 5.6% compared with the industry’s 5% yield. Shares of the company have jumped 13.9% compared with the industry’s 5.2% growth. DGX’s earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 2.5%.