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Quest Diagnostics Stock Gains 36.3% YTD: What's Behind the Rally?
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Key Takeaways
Quest Diagnostics' shares have rallied 36.3% YTD on strong momentum across its business.
DGX is benefiting from advanced diagnostics, new customers, acquisitions and channel growth.
DGX is using AI, automation and Invigorate to improve efficiency and target annual cost savings.
Quest Diagnostics’ (DGX - Free Report) shares have rallied 36.3% so far this year, highlighting strong momentum. The stock has outperformed the industry, which has gained 20%, as well as the S&P 500 composite, which has risen 12%.
Carrying a Zacks Rank #2 (Buy) at present, the renowned clinical laboratory benefits from growing momentum in advanced diagnostics, with strong demand across key testing areas and continued expansion in oncology. The company is seeing broad-based growth across its physician, hospital and consumer-testing channels. The greater adoption of AI and automation is driving efficiency, productivity gains and cost savings across laboratory operations.
Headquartered in Secaucus, NJ, Quest Diagnostics provides diagnostic information services to a broad range of customers within its primary channels of physicians, hospitals, patients and consumers. The company is a key provider of reference testing for approximately half of U.S. hospitals. Quest Diagnostics has pursued growth through strategic acquisitions and seeks to drive operational excellence across the customer value chain and its business.
Factors Favoring DGX’s Growth
The rally in the share price can be linked to the company’s ongoing momentum in advanced diagnostics, mainly in advanced cardiometabolic, autoimmune, brain health, oncology, and women's and reproductive health areas. Several of these areas delivered double-digit revenue growth in the second quarter of 2026. Demand remained elevated for ApoB, Lp(a) and liver fibrosis tests, while the company continued to grow its analyzer solution for autoimmune disorders. Quest Diagnostics advanced Haystack molecular resiMRD during the quarter, securing New York State approval that allows commercialization across all 50 states. The company also expanded access to cancer tests through Flatiron Health’s OncoEMR Molecular Profiling Integration platform.
Quest Diagnostics’ physician channel revenues are benefiting from new customer wins, higher business with existing customers and growth in regions where it expanded health plan access and completed acquisitions. The Fresenius Medical Care collaboration is also broadening its capabilities in kidney care. Hospital channel revenues also grew at a double-digit rate, primarily from Co-Lab Solutions with Corewell Health.
Image Source: Zacks Investment Research
The consumer-testing channel, QuestHealth.com, continued to drive revenue growth, supported by demand for wellness panels and newer services like thyroid testing. The platform is also attracting consumer, wearable and wellness partners through flexible technology integration.
On a broader note, rising chronic disease rates and growing demand for early diagnosis are also expected to support the clinical laboratory testing market and Quest Diagnostics’ long-term growth prospects.
Operationally, the company uses automation and AI across laboratory and administrative processes to offset labor, benefit and reimbursement pressures while improving service quality. During the second quarter, Quest Diagnostics expanded AI-enabled cervical cancer screening and front-end specimen-processing automation to additional laboratories. It also launched IntelliDraw to guide specimen collection at physician offices and plans to introduce an AI-based supply tool at patient service centers. The Invigorate program continues to target 3% annual cost savings and productivity improvements.
Concerns for DGX
Quest Diagnostics’ high leverage remains a concern, with $5.63 billion in long-term debt and $626 million in cash as of June 30, 2026. The company also remains exposed to changes in government reimbursement, health policy and payer bargaining power. Cost inflation could weigh on its margin growth.
A Glance at DGX’s Estimates
The Zacks Consensus Estimate for Quest Diagnostics’ 2026 and 2027 earnings per share (EPS) is expected to increase 13.2% and 7.3%, respectively, to $11.15 and $11.97. In the past 60 days, the Zacks Consensus Estimate for the company's 2026 EPS has risen 1.6%.
Revenues for 2026 are projected to grow 8.9% to $12.01 billion, followed by a 4.6% jump to $12.56 billion in 2027.
Veracyte has an earnings yield of 4.7% against the industry’s negative 1.4% yield. Shares of the company have risen 45.2% compared with the industry’s 3.3% growth. VCYT’s earnings outpaced estimates in each of the trailing four quarters, the average surprise being 41.8%.
Phibro Animal Health, sporting a Zacks Rank #1, has an earnings yield of 10.2% compared with the industry’s 2.5% yield. Its earnings beat estimates in each of the trailing four quarters, the average surprise being 18.4%. PAHC shares have fallen 12.7% against the industry’s 27.9% decline over the past year.
Globus Medical, sporting a Zacks Rank #1, has an earnings yield of 6.8% against the industry’s negative 1.7% yield. Its earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 27.9%. GMED shares have rallied 33.3% compared with the industry’s 3.3% growth over the past year.
View the Zacks #1 Rank List
Image: Bigstock
Quest Diagnostics Stock Gains 36.3% YTD: What's Behind the Rally?
Key Takeaways
Quest Diagnostics’ (DGX - Free Report) shares have rallied 36.3% so far this year, highlighting strong momentum. The stock has outperformed the industry, which has gained 20%, as well as the S&P 500 composite, which has risen 12%.
Carrying a Zacks Rank #2 (Buy) at present, the renowned clinical laboratory benefits from growing momentum in advanced diagnostics, with strong demand across key testing areas and continued expansion in oncology. The company is seeing broad-based growth across its physician, hospital and consumer-testing channels. The greater adoption of AI and automation is driving efficiency, productivity gains and cost savings across laboratory operations.
Headquartered in Secaucus, NJ, Quest Diagnostics provides diagnostic information services to a broad range of customers within its primary channels of physicians, hospitals, patients and consumers. The company is a key provider of reference testing for approximately half of U.S. hospitals. Quest Diagnostics has pursued growth through strategic acquisitions and seeks to drive operational excellence across the customer value chain and its business.
Factors Favoring DGX’s Growth
The rally in the share price can be linked to the company’s ongoing momentum in advanced diagnostics, mainly in advanced cardiometabolic, autoimmune, brain health, oncology, and women's and reproductive health areas. Several of these areas delivered double-digit revenue growth in the second quarter of 2026. Demand remained elevated for ApoB, Lp(a) and liver fibrosis tests, while the company continued to grow its analyzer solution for autoimmune disorders. Quest Diagnostics advanced Haystack molecular resiMRD during the quarter, securing New York State approval that allows commercialization across all 50 states. The company also expanded access to cancer tests through Flatiron Health’s OncoEMR Molecular Profiling Integration platform.
Quest Diagnostics’ physician channel revenues are benefiting from new customer wins, higher business with existing customers and growth in regions where it expanded health plan access and completed acquisitions. The Fresenius Medical Care collaboration is also broadening its capabilities in kidney care. Hospital channel revenues also grew at a double-digit rate, primarily from Co-Lab Solutions with Corewell Health.
Image Source: Zacks Investment Research
The consumer-testing channel, QuestHealth.com, continued to drive revenue growth, supported by demand for wellness panels and newer services like thyroid testing. The platform is also attracting consumer, wearable and wellness partners through flexible technology integration.
On a broader note, rising chronic disease rates and growing demand for early diagnosis are also expected to support the clinical laboratory testing market and Quest Diagnostics’ long-term growth prospects.
Operationally, the company uses automation and AI across laboratory and administrative processes to offset labor, benefit and reimbursement pressures while improving service quality. During the second quarter, Quest Diagnostics expanded AI-enabled cervical cancer screening and front-end specimen-processing automation to additional laboratories. It also launched IntelliDraw to guide specimen collection at physician offices and plans to introduce an AI-based supply tool at patient service centers. The Invigorate program continues to target 3% annual cost savings and productivity improvements.
Concerns for DGX
Quest Diagnostics’ high leverage remains a concern, with $5.63 billion in long-term debt and $626 million in cash as of June 30, 2026. The company also remains exposed to changes in government reimbursement, health policy and payer bargaining power. Cost inflation could weigh on its margin growth.
A Glance at DGX’s Estimates
The Zacks Consensus Estimate for Quest Diagnostics’ 2026 and 2027 earnings per share (EPS) is expected to increase 13.2% and 7.3%, respectively, to $11.15 and $11.97. In the past 60 days, the Zacks Consensus Estimate for the company's 2026 EPS has risen 1.6%.
Revenues for 2026 are projected to grow 8.9% to $12.01 billion, followed by a 4.6% jump to $12.56 billion in 2027.
Other Key Picks
Some other top-ranked stocks in the broader medical space are Veracyte (VCYT - Free Report) , Phibro Animal Health (PAHC - Free Report) and Globus Medical (GMED - Free Report) .
Veracyte has an earnings yield of 4.7% against the industry’s negative 1.4% yield. Shares of the company have risen 45.2% compared with the industry’s 3.3% growth. VCYT’s earnings outpaced estimates in each of the trailing four quarters, the average surprise being 41.8%.
VCYT sports a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Phibro Animal Health, sporting a Zacks Rank #1, has an earnings yield of 10.2% compared with the industry’s 2.5% yield. Its earnings beat estimates in each of the trailing four quarters, the average surprise being 18.4%. PAHC shares have fallen 12.7% against the industry’s 27.9% decline over the past year.
Globus Medical, sporting a Zacks Rank #1, has an earnings yield of 6.8% against the industry’s negative 1.7% yield. Its earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 27.9%. GMED shares have rallied 33.3% compared with the industry’s 3.3% growth over the past year.