December 12, 2024
Top 10 Stock Quest Diagnostics Strong Buy Recommendation
How to read the ranks
For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".
Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".
Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.
Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.
(NEW) Sentiment - quantifies professional analyst ratings and holdings as well as market pulse. Green = positive sentiment; red = skepticism (Only available to Premium Subscribers).
(NEW) 360° View - the ultimate rating with all financial and non-financial indicators.
Snapshot: Quest Diagnostics – Top 10 Stock in Dow Jones U.S. Health Care Providers Index
Quest Diagnostics is listed as a top 10 stock on December 12, 2024 in the market index D.J. US Health Care because of its high performance in at least one of the Obermatt investment strategies. As all consolidated Obermatt Ranks exhibit excellent performance, including positive market sentiment in the professional investor community, it is a solid stock investment where the risk of paying too much for the shares is limited. Based on the Obermatt 360° View of 84 (top 84% performer), Obermatt assesses an overall strong buy recommendation for Quest Diagnostics on December 12, 2024.
Snapshot: Obermatt Ranks
| Country | USA |
| Industry | Health Care Services |
| Index | Dividends USA, Diversity USA, D.J. US Health Care, S&P 500 |
| Size class | X-Large |
When Obermatt identifies the Top 10 stocks in a market, it’s based on a certain investment strategy. The best performing stocks usually aren’t the ones that everyone is talking about (those are often "over-priced" and have low Value ranks).
For each investment strategy, we provide you with more detailed analysis and our recommendation. You see the ranks of the top 10 stocks ranked by that particular investment strategy (360° View, Sentiment, Value, Growth, Safety and Combined Financial Performance).
360° View: Obermatt 360° View Quest Diagnostics Strong Buy
| 360 METRICS | December 12, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 63 |
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| GROWTH | ||||||||
| GROWTH | 55 |
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| SAFETY | ||||||||
| SAFETY | 52 |
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| SENTIMENT | ||||||||
| SENTIMENT | 85 |
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| 360° VIEW | ||||||||
| 360° VIEW | 84 |
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ANALYSIS: With an Obermatt 360° View of 84 (better than 84% compared with alternatives) for 2024, overall professional sentiment and financial characteristics for the stock Quest Diagnostics are very positive. The 360° View is based on consolidating four consolidated indicators, with all four indicators above average for Quest Diagnostics. The consolidated Value Rank has an attractive rank of 63, which means that the share price of Quest Diagnostics is on the lower side compared with the typical size in indicators such as revenues, profits, and invested capital. This means the stock price is lower than for 63% of alternative stocks in the same industry. The consolidated Growth Rank has a good rank of 55, which means that the company experiences above-average growth momentum when looking at financial metrics such as revenue, profit, and invested capital growth as well as stock returns. The company is also safely financed with a Safety rank of 52. Finally, professional market sentiment is above average compared with other stock investment alternatives with a Sentiment Rank of 85. ...read more
RECOMMENDATION: With a consolidated 360° View of 84, Quest Diagnostics is better positioned than 84% of all alternative stock investment opportunities based on the Obermatt Method. As all consolidated Obermatt Ranks exhibit excellent performance, such as good value (Value Rank of 63), above-average growth (Growth Rank of 55), safe financing practices (Safety Rank of 52), and a positive market sentiment in the professional investor community (Sentiment Rank of 85), it is a solid stock investment where the risk of paying too much for the shares is limited and disappointments are less likely to occur, unless information not publicly available. High-Value Ranks sometimes indicate that the company's future is challenging. If they are safely financed and have above average growth, and are still a good value, it may indicate that this will not continue. We recommend evaluating whether the future of Quest Diagnostics is as difficult as the stock’s low price, despite what good growth and safe financing practice suggest. Since the professional community is optimistic, you might have less to worry about, and the stock is just not sufficiently visible, which may indicate good timing right now. ...read more
Sentiment Strategy: Professional Market Sentiment for Quest Diagnostics very positive
ANALYSIS: With an Obermatt Sentiment Rank of 85 (better than 85% compared with alternatives) for 2024, overall professional sentiment and engagement for the stock Quest Diagnostics is very positive. The Sentiment Rank is based on consolidating four sentiment indicators, with half of the metrics below and half above average for Quest Diagnostics. Analyst Opinions are at a rank of 46 (worse than 54% of alternative investments), which means that currently, stock research analysts tend to warn against investing in the stock of the company. Worse, Analyst Opinions Change has a rank of 47, which means that stock research experts are getting even more pessimistic. Other sentiment indicators are positive: The Professional Investors rank is 91, which means that professional investors hold more stock in this company than in 91% of alternative investment opportunities. So, pros tend to favor investing in this company. In addition, Market Pulse has a rank of 90, which means that the current professional news and professional social networks tend to be positive when discussing this company (more positive news than for 90% of competitors). While stock research analysts are getting ever more critical, many professional investors are committed to Quest Diagnostics and the professional news channels are on the positive side. ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 85 (more positive than 85% compared with investment alternatives), Quest Diagnostics has a reputation among professional investors that is significantly higher than that of its competitors. This is an ambiguous picture: analysts are negative and getting even more critical, while the news in the market is positive. Who should investors believe? This is a difficult question in such a situation. Investors should proceed cautiously and verify not only the financial performance in the Obermatt Value, Growth and Safety Ranks but also independent news coverage of the company. ...read more
Value Strategy: Quest Diagnostics Stock Price Value better than average
ANALYSIS: With an Obermatt Value Rank of 63 (better than 63% compared with alternatives), Quest Diagnostics shares are more attractively priced than the majority of comparable stocks. The Value Rank is based on consolidating four value indicators, with half of the indicators below and half above average for Quest Diagnostics. Price-to-Profit (also referred to as price-earnings, P/E) is 50 which means that the stock price compared with what market professionals expect for future profits is lower than for 50% of comparable companies, indicating a good value concerning Quest Diagnostics's profit levels. The same is valid for Price-to-Book Capital (also referred to as market-to-book ratio) with a Price-to-Book Rank of 31, which means that the stock price is lower as regards to invested capital than for 31% of comparable investments. On the other hand, Price-to-Sales is less favorable than 78% of alternatives (only 22% of peers have an even less favorable ratio). The same is valid for dividend yield, which is lower than 5% of comparable companies, making the stock more expensive as regards to the company's expected dividend payouts. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 63, is a buy recommendation based on Quest Diagnostics's stock price compared with the company's operational size and dividend yields. This is a puzzling picture, because it means that profits are high while dividends are low. Since the stock price is low compared with invested capital but high in respect to expected revenues, it means that the company has more invested capital than peers for generating the same amount of revenue. Since profits are higher, it could be a "cash cow" situation (using the classic Boston Consulting BCG matrix naming convention) where the company is on a downward trend, still living from the profits of past products. As the company pays low dividends, it may harbor the opinion that a turnaround is possible, and it rather invests the cash than pay it out to shareholders, thus sealing the company's fate early. Any investment optimism should only be a buy trigger once thorough research is completed. ...read more
Growth Strategy: Quest Diagnostics Growth Momentum good
| GROWTH METRICS | December 12, 2024 | |||||||
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| REVENUE GROWTH | ||||||||
| REVENUE GROWTH | 64 |
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| PROFIT GROWTH | ||||||||
| PROFIT GROWTH | 32 |
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| CAPITAL GROWTH | ||||||||
| CAPITAL GROWTH | 66 |
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| STOCK RETURNS | ||||||||
| STOCK RETURNS | 57 |
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| CONSOLIDATED RANK: GROWTH | ||||||||
| CONSOLIDATED RANK: GROWTH | 55 |
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ANALYSIS: With an Obermatt Growth Rank of 55 (better than 55% compared with alternatives), Quest Diagnostics shows an above-average growth dynamic in its industry. Investors also speak of positive momentum. The Growth Rank is based on consolidating four value indicators, with all but one indicator above average for Quest Diagnostics. Sales Growth has a rank of 64 which means that currently, professionals expect the company to grow more than 64% of its competitors. Capital Growth is also above 32% of competitors with a rank of 66, and Stock Returns with the rank of 57 is also an outperformance. Only Profit Growth is low with a rank of 32 which means that currently, professionals expect the company to grow its profits less than 68% of its competitors. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 55, is a buy recommendation for growth and momentum investors. All three operating growth indicators, namely revenue, profit, and capital growth, are showing improvements. This is a good indication of a company with a positive future. That might, at the same time, be the simple reason why profit growth is low. A growing company needs money and thus can't yet show high profit growth. Look out for signs in corporate communication about extra growth efforts costing time and money. If that is the case, Quest Diagnostics is a good growth stock. ...read more
Safety Strategy: Quest Diagnostics Debt Financing Safety above-average
| SAFETY METRICS | December 12, 2024 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 40 |
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| REFINANCING | ||||||||
| REFINANCING | 34 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 69 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 52 |
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ANALYSIS: With an Obermatt Safety Rank of 52 (better than 52% compared with alternatives), the company Quest Diagnostics has financing practices on the safer side, which mean that their overall debt burden is lower than average. This doesn't mean that the business of Quest Diagnostics is safe, it only means that the company is on the safer side regarding possible bankruptcy, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with just one indicator above average for Quest Diagnostics. Liquidity is at 69, meaning the company generates more profit to service its debt than 69% of its competitors. This indicates that the company is safer when it comes to debt service. But Refinancing is riskier at a rank of 34, which means that the portion of the debt that is about to be refinanced is above average. It has more debt in the refinancing stage than 66% of its competitors. Leverage is also high at a rank of 40, which means that the company has an above-average debt-to-equity ratio. It has more debt than 60% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 52 (better than 52% compared with alternatives), Quest Diagnostics has a financing structure that is safer than that of its competitors. High Leverage (a low Obermatt Leverage Rank) is good in good times, because it usually indicates that shareholders get higher returns. The good Liquidity performance of the company is an indicator that this is the case. However, if you expect an economic downturn, you may stay clear of this stock because they have an above-average debt level that needs refinancing soon. ...read more
Combined financial peformance: Quest Diagnostics Above-Average Financial Performance
| COMBINED PERFORMANCE | December 12, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 63 |
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| GROWTH | ||||||||
| GROWTH | 55 |
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| SAFETY | ||||||||
| SAFETY | 69 |
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| COMBINED | ||||||||
| COMBINED | 65 |
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ANALYSIS: With an Obermatt Combined Rank of 65 (better than 65% compared with investment alternatives), Quest Diagnostics (Health Care Services, USA) shares have above-average financial characteristics compared with similar stocks. Shares of Quest Diagnostics are a good value (attractively priced) with a consolidated Value Rank of 63 (better than 63% of alternatives), show above-average growth (Growth Rank of 55), and are safely financed (Safety Rank of 52), which means low debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 65, is a buy recommendation based on Quest Diagnostics's financial characteristics. As the company Quest Diagnostics's key financial metrics all exhibit excellent performance, such as good value (Obermatt Value Rank of 63), above-average growth (Obermatt Growth Rank of 55), and indicate that the company is safely financed (Obermatt Safety Rank of 52), it is a solid stock investment where the risk of paying too much for the share is limited, unless the company has a bleak future. Such good financial performance can indicate that the company's future might actually be challenging, as it may be difficult to maintain the good performance. If they are safely financed and have been growing above average, and are still a good value, it means that the market is keeping prices low, for a reason which may become clearer over time. We recommend evaluating the future of Quest Diagnostics. If you believe the company's future is market-typical or even better, this could be an argument for a share purchase. ...read more
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