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Is Now the Right Time to Hold Labcorp Stock in Your Portfolio?
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Key Takeaways
LH shares have surged 48.2% year to date, outperforming the industry and S&P 500 amid business expansion.
Specialty testing growth, automation and AI helped LH achieve its sixth quarter of margin expansion.
Currency headwinds, intense competition and acquisition-related execution risks could limit LH's growth.
Labcorp Holdings Inc. (LH - Free Report) , or Labcorp, is expanding in high-growth specialty testing markets while broadening its consumer testing business. The company also continues to leverage artificial intelligence (AI), automation and operational initiatives to strengthen productivity and margins. Meanwhile, macroeconomic uncertainty and unfavorable foreign exchange could pressure Labcorp’s growth.
Year to date, this Zacks Rank #3 (Hold) stock has risen 48.2% compared with 6.9% growth of the industry and a 6.7% rise of the S&P 500 composite.
The renowned healthcare diagnostics company has a market capitalization of $29.77 billion. Labcorp’s earnings yield of 5% favorably compares with the industry’s 4% yield. The company delivered an average earnings surprise of 3.5% for the trailing four quarters.
Let’s delve deeper.
Tailwinds for Labcorp
Targeted Development in High-Growth Areas: Labcorp continues to expand in specialty testing areas such as oncology, women's health, autoimmune disease and neurology. These areas delivered double-digit revenue growth during the first half of 2026, while management indicated that specialty testing continues to grow about three times faster than the broader diagnostics market.
In the third quarter, Labcorp received FDA approval for its PGDx elio tissue complete CDx companion diagnostic for advanced melanoma. It also announced a collaboration to evaluate its Plasma Detect Genome MRD test in patients with muscle-invasive bladder cancer. Consumer testing also expanded through Labcorp OnDemand, which now offers more than 140 panels and tests. Specialty testing supports higher tests per accession and favorable mix across the core laboratory business.
Focus on Operational Efficiency: Labcorp is using technology, automation and artificial intelligence to improve productivity and customer access. Enterprise adjusted operating margin expanded 60 basis points year over year to 15% in the third quarter of 2026. Diagnostics margin increased 40 basis points to 16.7%, while BLS margin rose 180 basis points to 18.3%.
Management attributed the gains to organic revenue growth, operating efficiencies and strategic actions within Early Development. The third quarter marked the sixth consecutive quarter of year-over-year adjusted margin expansion across the enterprise and both operating segments.
The LaunchPad program remains on track to deliver $125 million in savings during 2026. Labcorp is also expanding laboratory automation, digital pathology and technology-enabled solutions, including MyLabcorp and Global Trial Connect. These initiatives reduce administrative friction and support more efficient laboratory operations.
Image Source: Zacks Investment Research
Headwinds for Labcorp
Currency Exposure: Labcorp operates internationally through its diagnostic and biopharmaceutical laboratory businesses, creating exposure to exchange-rate movements. Full-year guidance now assumes exchange rates effective as of Sept. 30, 2026, and includes a 30-basis-point benefit to enterprise revenue growth and a 130-basis-point benefit to BLS growth.
These assumptions are lower than the respective 40-basis-point and 150-basis-point benefits in the prior outlook. Management also identified approximately $10 million in incremental currency-related revenue headwinds relative to its previous guidance. Additional adverse exchange-rate movements could weaken reported revenue growth and reduce the benefit of international operations, even when underlying customer activity remains stable.
Competitive Landscape: The commercial laboratory market remains highly competitive across price, service, turnaround time and specialty offerings. Labcorp competes with national and regional laboratories, health-system laboratories and internal departments of pharmaceutical, biotechnology and diagnostic companies. BLS can also experience periods of price competition that affect segment profitability. Larger competitors may use scale and automation to lower testing costs, while hospital systems may retain laboratory activity internally. Competitive intensity and recent acquisition-related execution risks could therefore limit future profitability gains.
LH Stock Estimate Trend
In the past 30 days, the Zacks Consensus Estimate for Labcorp’s 2026 earnings per share (EPS) has edged up 0.9% to $18.48.
The Zacks Consensus Estimate for 2026 revenues is pegged at $14.80 billion, implying 6.1% growth relative to the 2025 figure.
Key Picks
Some better-ranked stocks in the broader medical space are Phibro Animal Health (PAHC - Free Report) , IDEXX Laboratories (IDXX - Free Report) and Globus Medical (GMED - Free Report) .
Phibro Animal Health has an earnings yield of 10.6% compared with the industry’s 2.8% yield. Shares of the company have lost 28.1% compared with the industry’s 19.1% decline over the past year. PAHC’s earnings outpaced estimates in three of the trailing four quarters and matched on one occasion, the average surprise being 12.43%.
IDEXX Laboratories, currently carrying a Zacks Rank #2, has an earnings yield of 2.2% against the industry’s negative 2.3% yield. Its earnings beat estimates in each of the trailing four quarters, the average surprise being 5.5%. IDXX’s shares have plunged 4.8% against the industry’s 3% growth over the past year.
Globus Medical, presently carrying a Zacks Rank #2, has an earnings yield of 7% against the industry’s negative 2.3% yield. Its earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 16.2%. GMED’s shares have lost 17.7% compared to the industry’s 3% gain over the past year.
View the Zacks #1 Rank List
Image: Bigstock
Is Now the Right Time to Hold Labcorp Stock in Your Portfolio?
Key Takeaways
Labcorp Holdings Inc. (LH - Free Report) , or Labcorp, is expanding in high-growth specialty testing markets while broadening its consumer testing business. The company also continues to leverage artificial intelligence (AI), automation and operational initiatives to strengthen productivity and margins. Meanwhile, macroeconomic uncertainty and unfavorable foreign exchange could pressure Labcorp’s growth.
Year to date, this Zacks Rank #3 (Hold) stock has risen 48.2% compared with 6.9% growth of the industry and a 6.7% rise of the S&P 500 composite.
The renowned healthcare diagnostics company has a market capitalization of $29.77 billion. Labcorp’s earnings yield of 5% favorably compares with the industry’s 4% yield. The company delivered an average earnings surprise of 3.5% for the trailing four quarters.
Let’s delve deeper.
Tailwinds for Labcorp
Targeted Development in High-Growth Areas: Labcorp continues to expand in specialty testing areas such as oncology, women's health, autoimmune disease and neurology. These areas delivered double-digit revenue growth during the first half of 2026, while management indicated that specialty testing continues to grow about three times faster than the broader diagnostics market.
In the third quarter, Labcorp received FDA approval for its PGDx elio tissue complete CDx companion diagnostic for advanced melanoma. It also announced a collaboration to evaluate its Plasma Detect Genome MRD test in patients with muscle-invasive bladder cancer. Consumer testing also expanded through Labcorp OnDemand, which now offers more than 140 panels and tests. Specialty testing supports higher tests per accession and favorable mix across the core laboratory business.
Focus on Operational Efficiency: Labcorp is using technology, automation and artificial intelligence to improve productivity and customer access. Enterprise adjusted operating margin expanded 60 basis points year over year to 15% in the third quarter of 2026. Diagnostics margin increased 40 basis points to 16.7%, while BLS margin rose 180 basis points to 18.3%.
Management attributed the gains to organic revenue growth, operating efficiencies and strategic actions within Early Development. The third quarter marked the sixth consecutive quarter of year-over-year adjusted margin expansion across the enterprise and both operating segments.
The LaunchPad program remains on track to deliver $125 million in savings during 2026. Labcorp is also expanding laboratory automation, digital pathology and technology-enabled solutions, including MyLabcorp and Global Trial Connect. These initiatives reduce administrative friction and support more efficient laboratory operations.
Image Source: Zacks Investment Research
Headwinds for Labcorp
Currency Exposure: Labcorp operates internationally through its diagnostic and biopharmaceutical laboratory businesses, creating exposure to exchange-rate movements. Full-year guidance now assumes exchange rates effective as of Sept. 30, 2026, and includes a 30-basis-point benefit to enterprise revenue growth and a 130-basis-point benefit to BLS growth.
These assumptions are lower than the respective 40-basis-point and 150-basis-point benefits in the prior outlook. Management also identified approximately $10 million in incremental currency-related revenue headwinds relative to its previous guidance. Additional adverse exchange-rate movements could weaken reported revenue growth and reduce the benefit of international operations, even when underlying customer activity remains stable.
Competitive Landscape: The commercial laboratory market remains highly competitive across price, service, turnaround time and specialty offerings. Labcorp competes with national and regional laboratories, health-system laboratories and internal departments of pharmaceutical, biotechnology and diagnostic companies. BLS can also experience periods of price competition that affect segment profitability. Larger competitors may use scale and automation to lower testing costs, while hospital systems may retain laboratory activity internally. Competitive intensity and recent acquisition-related execution risks could therefore limit future profitability gains.
LH Stock Estimate Trend
In the past 30 days, the Zacks Consensus Estimate for Labcorp’s 2026 earnings per share (EPS) has edged up 0.9% to $18.48.
The Zacks Consensus Estimate for 2026 revenues is pegged at $14.80 billion, implying 6.1% growth relative to the 2025 figure.
Key Picks
Some better-ranked stocks in the broader medical space are Phibro Animal Health (PAHC - Free Report) , IDEXX Laboratories (IDXX - Free Report) and Globus Medical (GMED - Free Report) .
Phibro Animal Health has an earnings yield of 10.6% compared with the industry’s 2.8% yield. Shares of the company have lost 28.1% compared with the industry’s 19.1% decline over the past year. PAHC’s earnings outpaced estimates in three of the trailing four quarters and matched on one occasion, the average surprise being 12.43%.
PAHC carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
IDEXX Laboratories, currently carrying a Zacks Rank #2, has an earnings yield of 2.2% against the industry’s negative 2.3% yield. Its earnings beat estimates in each of the trailing four quarters, the average surprise being 5.5%. IDXX’s shares have plunged 4.8% against the industry’s 3% growth over the past year.
Globus Medical, presently carrying a Zacks Rank #2, has an earnings yield of 7% against the industry’s negative 2.3% yield. Its earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 16.2%. GMED’s shares have lost 17.7% compared to the industry’s 3% gain over the past year.