Fact based stock research
Quest Diagnostics (NYSE:DGX)

US74834L1008

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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.

Quest Diagnostics stock research in summary

questdiagnostics.com

ANALYSIS: With an Obermatt Combined Rank of 77 (better than 77% compared with investment alternatives), Quest Diagnostics (Health Care Services, USA) shares have much better financial characteristics than comparable 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 59), and are safely financed (Safety Rank of 59), which means low debt burdens. ...read more

RECOMMENDATION: A Combined Rank of 77, is a strong 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 59), and indicate that the company is safely financed (Obermatt Safety Rank of 59), 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. Obermatt Premium subscribers can further check the stock’s Sentiment Ranks, which also flow into the Obermatt 360° View for investors. ...read more

Latest Obermatt Ranks


360° View^new
Sentiment Rank^new
Value Rank	63
Growth Rank	59
Safety Rank	59
Combined Rank	77

Country	USA
Industry	Health Care Services
Index	Dividends USA, Diversity USA, D.J. US Health Care, S&P 500
Size class	X-Large

This stock has achievements: Top 10 Stock.

14-Nov-2024. Stock data may be delayed. Log in or sign up to get the most recent research.

Further information

Multiple opinions. One number.

Analysts rarely agree on a stock’s future. So, who do you believe? Obermatt translates those collective views into a single Sentiment Rank. That plus the financial ranks give you the ultimate 360° View. Sign up to access them.

Why popular stocks have low ratings

It’s easier said than done. When your stock drops, it’s easy to want to sell it and find a better performer. Think twice, or even three times, before trading. Those fees (especially the hidden ones) can eat up your gains.

Review the performance ranks of the individual metrics that form each investment strategy.

Research History: Quest Diagnostics

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	85	83	76	63
GROWTH
GROWTH	61	37	7	59
SAFETY
SAFETY	56	58	54	59
SENTIMENT
SENTIMENT	n/a	89	37	^new
360° VIEW
360° VIEW	n/a	93	30	^new

Most recent update of the stock research: 14-Nov-2024. Financial reporting date used for calculating ranks: 30-Jun-2024. Stock research history is based on the Obermatt Method. The higher the rank, the better Quest Diagnostics is in the corresponding investment strategy.
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Combined financial peformance in Detail

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	85	83	76	63
GROWTH
GROWTH	61	37	7	59
SAFETY
SAFETY	56	58	54	59
COMBINED
COMBINED	87	78	35	77

Last update of combined financial performance: 14-Nov-2024. Stock analysis on combined financial performance: The higher the rank of Quest Diagnostics the better the performance.

Value Metrics in Detail

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 51 which means that the stock price compared with what market professionals expect for future profits is lower than for 51% 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 29, which means that the stock price is lower as regards to invested capital than for 29% of comparable investments. On the other hand, Price-to-Sales is less favorable than 77% of alternatives (only 23% 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. We recommend further analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks, including the 360° View, before making an investment decision, which is especially important in this case, as the financial indicators are inconclusive. ...read more

VALUE METRICS	2021	2022	2023	2024
PRICE VS. REVENUES (P/S)
PRICE VS. REVENUES (P/S)	68	34	20	23
PRICE VS. PROFITS (P/E)
PRICE VS. PROFITS (P/E)	100	54	61	51
PRICE VS. CAPITAL (Market-to-Book)
PRICE VS. CAPITAL (Market-to-Book)	47	71	50	29
DIVIDEND YIELD
DIVIDEND YIELD	66	92	94	95
CONSOLIDATED RANK: VALUE
CONSOLIDATED RANK: VALUE	85	83	76	63

Last update of Value Rank: 14-Nov-2024. Stock analysis on value ratios: The higher the rank, the lower the value ratio of Quest Diagnostics; except for dividend yield where the rank is higher, the higher the yield.

Growth Metrics in Detail

ANALYSIS: With an Obermatt Growth Rank of 59 (better than 59% 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 66 which means that currently, professionals expect the company to grow more than 66% of its competitors. Capital Growth is also above 34% of competitors with a rank of 60, and Stock Returns with the rank of 53 is also an outperformance. Only Profit Growth is low with a rank of 34 which means that currently, professionals expect the company to grow its profits less than 66% of its competitors. ...read more

RECOMMENDATION: The overall picture with a consolidated Growth Rank of 59, 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. While momentum is a popular investment factor, the value aspect might be the more important one, in the longer term. We recommend analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks to arrive at a 360° View of the stock purchase case. ...read more

GROWTH METRICS	2021	2022	2023	2024
REVENUE GROWTH
REVENUE GROWTH	63	5	12	66
PROFIT GROWTH
PROFIT GROWTH	38	66	27	34
CAPITAL GROWTH
CAPITAL GROWTH	n/a	33	28	60
STOCK RETURNS
STOCK RETURNS	53	71	23	53
CONSOLIDATED RANK: GROWTH
CONSOLIDATED RANK: GROWTH	61	37	7	59

Last update of Growth Rank: 14-Nov-2024. Stock analysis on growth metrics: The higher the rank, the higher the growth and returns of Quest Diagnostics.

Safety Metrics in Detail

ANALYSIS: With an Obermatt Safety Rank of 59 (better than 59% 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 72, meaning the company generates more profit to service its debt than 72% of its competitors. This indicates that the company is safer when it comes to debt service. But Refinancing is riskier at a rank of 37, 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 63% 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 59 (better than 59% 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. If the company is sailing with good winds, as may be visible from the Growth and Sentiment performance, the refinancing risk may be lower than the low Refinancing rank suggests. ...read more

SAFETY METRICS	2021	2022	2023	2024
LEVERAGE
LEVERAGE	49	52	46	40
REFINANCING
REFINANCING	67	37	27	37
LIQUIDITY
LIQUIDITY	69	71	71	72
CONSOLIDATED RANK: SAFETY
CONSOLIDATED RANK: SAFETY	56	58	54	59

Last update of Safety Rank: 14-Nov-2024. Stock analysis on safety metrics: The higher the rank, the lower the leverage of Quest Diagnostics and the more cash is available to service its debt.

Sentiment Metrics in Detail

SENTIMENT	2021	2022	2023	2024
ANALYST OPINIONS
ANALYST OPINIONS	n/a	40	28	^new
OPINIONS CHANGE
OPINIONS CHANGE	n/a	55	25	^new
PRO HOLDINGS
PRO HOLDINGS	n/a	95	55	^new
MARKET PULSE
MARKET PULSE	n/a	78	71	^new
CONSOLIDATED RANK: SENTIMENT
CONSOLIDATED RANK: SENTIMENT	n/a	89	37	^new

Last update of Sentiment Rank: 14-Nov-2024. Stock analysis on sentiment metrics: The higher the rank, the more positive the sentiment for Quest Diagnostics.
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