DGX US S&P 500Russell 1000 Earnings call · transcribed from the recording
Quest Diagnostics (DGX) · Q3 2026 results and valuation
Share price: $258.69 · 2026-11-11
Quest Diagnostics provides laboratory testing and diagnostic insights to physicians, hospitals, and individual patients. The company operates a network of laboratories and patient service centers across the United States and in selected international locations. Source: 10-K annual report (2026-02-26)
Results Q3 2026 vs Q2 2026 · previous quarter · published 22 Oct 2026 and 23 Jul 2026
Net income down 2.5% on the previous quarter. Management sounded upbeat, in its script and in answers to analysts.
1 · Numbers
−2.5%
Net income vs Q2 2026
Outlook given
Net income 312.0M vs 320.0M
Revenue +1.8%
2 · How management spoke
Upbeat
More upbeat than 73% of company calls
Answers to analysts: typical, in line with the script.
Similar to last call.
3 · What stood out
Quest Diagnostics expects its growth rate across consumer health to exceed 30% for the full year.
Valuation
Is Quest Diagnostics undervalued?
Reverse DCF. Free cash flow from the last full fiscal year (2025-12-31), grown for 10 years, discounted back, plus a terminal value. “Implied growth” is the rate the current price assumes.
At 3.7% growth a year (3-year revenue growth), the model's fair value is $131.44 a share — the stock trades 97% above it. Today's price assumes 10.9% growth a year.
Current price
$258.69
close of 2026-11-11
Market implies growth of iThe yearly free-cash-flow growth, for the next 10 years, that today’s share price already assumes. If you believe the company grows faster than this, the stock is cheap under this model; slower, and it is expensive.
+10.9% for 10 yrs
Fair value / share
$131.44
Buy below
$98.58
Price vs fair value
Overvalued 97%
Price vs buy-below price
Overvalued 162%
Management expects
Revenue +9.5% · from the Q3 2026 report: “DGX updated its revenue guidance to between $12.065 billion and $12.105 billion, reflecting a growth rate of 9.3% to 9.7%.”
A guidance figure for revenue, usually one year ahead, not a 10-year free-cash-flow rate.
Read between the lines
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Guidance
DGX updated its revenue guidance to between $12.065 billion and $12.105 billion, reflecting a growth rate of 9.3% to 9.7%.
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Figure
DGX grew revenues 10% and adjusted earnings per share over 15% due to strength across physician, hospital, and consumer channels along with gains from automation and AI.
Source quote
“We grew revenues 10% and adjusted earnings per share over 15% in the quarter on continued strength across our physician, hospital, and consumer channels complemented by productivity gains from automation and AI.”
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Guidance
The company expects its growth rate across consumer health to exceed 30% for the full year.
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Guidance
DGX expects 70% of the impact to occur in the second half and 30% in the first half.
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Key theme
The company expects HICS to have a 10 to 20 basis point impact in Q4.
Source quote
“The expectation for Q4 is that we've sized it as a 10 to 20 basis point impact from HICS in Q4.”
3 more
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Guidance
DGX raised its full-year guidance for revenues and earnings per share due to growth trends and strong performance.
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Key theme
The company expects to see improved margins from the Corwell and Fresenius partnerships as it enters 2027.
Source quote
“From a margin perspective, Anne, we do expect to see some continued improvement on the margin from those two partnerships, Corwell and Fresenius, as we enter 2027.”
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Key theme
Revenue in the hospital channel grew by double digits during the quarter due to strong volume from CoLab Solutions with Corwell Health in Michigan.
Source quote
“In the hospital channel, we grew revenues by double digits during the quarter on strong volume from CoLab Solutions with Corwell Health in Michigan.”
Tone
How upbeat the language was, compared with other companiesiTone counts positive minus negative finance words, adjusted for length. Executives mostly speak positively, so the labels compare each call with every company's latest call: “typical” is the middle third, “very upbeat” the top tenth, “cautious” the bottom tenth.. Dot: Q3 2026. Ring: Q2 2026.
Script and answers carried a similar tone, so the script's message held up under questioning.
Sentences that drove the tone
“In the physician channel in the quarter, revenue grew above mid-single digits, so strong revenue growth, strong volume growth.”
“Our robust organic revenue growth demonstrates that our solutions are fulfilling the expanding clinical care needs of an aging population as well as the increasing number of people focused on...”
“From reference and CoLab arrangements to outreach acquisitions, we improve quality, innovation, and efficiency.”
Full figures
USD · SEC EDGAR XBRL (10-Q, period end 2026-09-30)
| Metric | Q3 2026period end 2026-09-30 | Q2 2026period end 2026-06-30 | Change | Q3 2025 | YoY |
|---|---|---|---|---|---|
| Revenue | 3.10B | 3.04B | +1.8% | 2.82B | +10.0% |
| Gross profit | 1.04B | 1.03B | +1.5% | 949.0M | +9.8% |
| Operating income | 479.0M | 459.0M | +4.4% | 386.0M | +24.1% |
| Net income | 312.0M | 320.0M | −2.5% | 245.0M | +27.3% |
| EPS | 2.78 | 2.84 | −2.1% | 2.16 | +28.7% |
| P/E today 25.5 | 23.2 | 22.5 | +0.7 | 22.4 | +0.8 |
Topics
Most discussed now
- The 40 basis point improvement versus prior year was driven by organic revenue growth, partially offset by wage increases and...
- With its strong business performance and growth momentum, Quest Diagnostics is raising its revenue and EPS guidance for the full year.
Faded since Q2 2026
- Fading On an adjusted basis, operating income was $502 million or 16.5% of revenues compared to $466 million or 16.9% of...
- Fading One is Quest Diagnostics' pure reference business and the second is its Co-Lab business.
- Fading In total, that portfolio was up significantly, driven primarily by the Corewell Health relationship.
- Fading What Quest Diagnostics does know last time is that only 1% of the labs submitted data.
Latest announcements
Official filings, newest first. Summaries are generated from each filing and its attachment; every figure is checked against the source.
- Other events · SEC 8-K
Quest Diagnostics reported unauthorized access to its Quanum LSM system on October 21, 2026, potentially affecting certain patient records without materially disrupting business operations.
- Results of operations · SEC 8-K
Quest Diagnostics reported third-quarter revenues of $3.10 billion, up 10.0% from 2025, and reported diluted earnings per share of $2.78, up 28.7% from 2025.
- Director or officer change · SEC 8-K
Catherine T. Doherty will transition to a new Executive Vice President role on November 1, 2026, with an annual base salary of $650,000 and a target equity award of $1,200,000.
- Results of operations · SEC 8-K
Quest Diagnostics reported second-quarter revenues of $3.04 billion, up 10.2% from 2025, and reported diluted earnings per share of $2.84, up 15.0% from the previous year.
- Shareholder vote results · SEC 8-K · routine
- Material agreement · SEC 8-K
Quest Diagnostics Incorporated issued $500,000,000 of 5.000% senior notes due 2036 on May 6, 2026.
- Other events · SEC 8-K
Quest Diagnostics priced a public offering of $500 million of its 5.000% senior notes due 2036 to be used for general corporate purposes and repayment of debt.
- Results of operations · SEC 8-K
Quest Diagnostics reported first-quarter revenues of $2.90 billion, up 9.2% from 2025, and reported diluted earnings per share of $2.24, up 15.5% from the previous year.
Catalyst calendar
management-stated targets — from the latest earnings call; plans, not promises.
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later this year
closing of the transaction to acquire select outreach assets from a long-time CoLab customer
Source quote
“We expect to close this transaction later this year.”
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for the full year
growth rate across consumer health
Source quote
“We expect our growth rate across consumer health to exceed 30% for the full year.”
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next year
introduction of the Waters innovation to clinicians, health plans, and consumers of QuestHealth.com
Source quote
“We expect to introduce the Waters innovation to clinicians, health plans, and consumers of QuestHealth.com next year.”
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fall of 2027
begin to deploy EPIC solutions in our first lab
Source quote
“Project NOVA, our initiative to enhance the experiences of healthcare providers and patients recently advanced from the design phase to the solutions build phase, and we are on schedule to begin to deploy EPIC solutions in our first lab in the fall of 2027.”
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mid-November
CBO to score the legislation
Source quote
“We have been told by our champions on the Hill to expect CBO to score the legislation by mid-November.”