Market Intelligence Center  Nov 18  Comment 
After closing Tuesday at $68.04, Quest Diagnostics Inc (DGX) presents an attractive opportunity to get a 5.44% return in just 58 days, which is an annualized return of 34.22% (for comparison purposes only). To enter this trade, sell one Jan. '16...
newratings.com  Nov 10  Comment 
WASHINGTON (dpa-AFX) - Quest Diagnostics Inc. (DGX) said it has agreed to acquire the outreach laboratory service business of Clinical Laboratory Partners or CLP, a wholly-owned subsidiary of Hartford HealthCare. Financial terms of the deal, which...
Market Intelligence Center  Nov 6  Comment 
A covered call identified by MarketIntelligececenter.com's patented algorithms on Quest Diagnostics Inc (DGX) could yield about 5.26% (27.44% annualized, for comparison purposes only) in 70 days. Pair a long position in the stock with the Jan. '16...
newratings.com  Oct 22  Comment 
WASHINGTON (dpa-AFX) - Quest Diagnostics Inc. (DGX) Thursday said its third-quarter net income increased to $342 million or $2.35 per share from $129 million or $0.88 per share in the previous year. Adjusted earnings per share advanced to $1.28...
Benzinga  Oct 21  Comment 
Quest Diagnostics (NYSE: DGX), the world's leading provider of diagnostic information services, announced today that its ExamOne business, the leader in helping insurers meet their underwriting needs, has agreed to acquire the business assets of...
newratings.com  Oct 21  Comment 
WASHINGTON (dpa-AFX) - Quest Diagnostics (DGX) released earnings for its third quarter that increased compared to the same period last year. The company said its bottom line came in at $172 million, or $1.28 per share. This was up from $161...


Quest Diagnostics (DGX) is the largest independent research and testing laboratory in the world, holding approximately 14% of the $40 billion laboratory services market. The company provides diagnostic testing, information, and services, for the health care industry, primarily in the United States. Despite having a large domestic presence, Quest also operates in Central and South America and Europe. The company offers routine tests, including blood cholesterol level, blood chemistries, and Pap tests, and esoteric testing services, which includes genetic and immunologic testing, among others. It also provides testing services for clinical trials and risk assessment services for the life insurance industry.

In addition to offering testing services, Quest also manufactures and markets diagnostic and testing equipment for sale to hospitals, other laboratories, physicians, and health insurance companies, to name a few. Quest operates a network of approximately 2,000 patient service centers and principal laboratories, as well as approximately 150 smaller laboratories.

Despite the loss of its United HealthCare contract to rival Laboratory Corporation of America Holdings (LH), Quest's performance hasn't suffered much at all. Profit margins are still high, and the company continues to release many improved tests. With a strong series of innovative developments, Quest is in a good position to maintain its strong performance in the future. Possible threats to this include political pressure to lower health care costs, budget cuts to Medicare or Medicaid, and increasing competition in the industry.

History and Corporate Overview

Originally founded as MetPath in 1967, Quest Diagnostics has become the leading provider of medical diagnostic testing, information, and services, in the U.S. A number of strategic acquisitions has allowed Quest to expand into nearly every area of the medical imaging and diagnostic industry, cementing its position at the forefront of the U.S. laboratory services market. As a result of the 1999 acquisition of SmithKline Beecham Clinical Laboratories (SBCL), GlaxoSmithKline (GSK) holds a sizable amount of Quest's stock. The company earned $7.4 billion in net revenue and $729 million in net income in 2009.[1]

The majority of Quest's business focuses on laboratory testing; other services generate less than 10% of sales. Additionally, the majority of Quest's sales come from within the U.S., with only a fraction coming from international sources.

AKAIK you've got the anwesr in one!

Business Growth

FY 2009 (ended December 31, 2009)[1]

  • Net revenue increased by 2.8% to $7.4 billion, up from $7.2 billion in the previous year.
  • Net income increased by 25% to $729 million.

Business Drivers

Acquisitions growth

Quest has augmented its organic growth with several recent acquisitions, adding testing facilities, obtaining rights to proprietary tests, and strengthening its position in certain geographies. Two of Quest's most recent acquisitions, Enterix and HemoCue, have helped to greatly expand its international presence. These acquisitions have also helped to balance Quest's loss of the United HealthCare contract to LabCorp. UnitedHealth Group is a managed health care group, a branch of United Healthcare, one of the largest domestic health insurers.

Some of Quest's most notable acquisitions include:

  • Focus Diagnostics: Focus Diagnostics is a leading provider of infectious and immunologic disease testing and has introduced new tests to the market, including diagnostic tests for Lyme disease, West Nile virus, and SARS.
  • Enterix: is an Australian-based company that offers immunology tests.
  • HemoCue: HemoCue is a leading producer of near-patient or point-of-care hemoglobin tests.
  • AmeriPath: AmeriPath is a national diagnostic test company specializing in anatomic pathology.

Product Development/Organic Growth

The big news around Quest normally involves new tests or other breakthroughs that the company develops. Most recently, Quest announced that it had developed a new test to help doctors diagnose metabolic disorders, and released Focus Diagnostics' HerpesSelect tests in March of the same year.

The segments with the most new developments are:

  • Ten new tests were developed for blood chemistries relating to oncology.
  • Fourteen tests were added to Quest's offerings of infectious disease testing for pre- and post-operation patients.
  • Eleven tests complete Quest's typing capability for bone marrow transplantation, tumor vaccination, and immunotherapy.
  • Quest added nine tests to the FDA-registered laboratory for Human Cell, Tissues' and Cellular and Tissue-Based Products Donor Testing, where tissue donors can get tested for communicable diseases.

Quest has also received positive attention for successfully cutting costs to balance the loss of the UnitedHealth Group contract.

Mighty useful. Make no mistake, I apperictae it.

Political policy risks

Though Quest does have some international presence, the fact remains that it operates primarily in the United States, with domestic sales accounting for 97% of total revenue. As such, changes in the policies governing the U.S. medical industry can have a significant impact, whereas the company is much less leveraged to conditions abroad. Quest could benefit from increased concern for health and wellness, especially if government programs help increase the availability of health care for U.S. citizens. On the other hand, there have been moves by some politicians to lower the prices throughout the medical industry, which would undoubtedly have a negative impact on Quest's profit margins. Depending on how these, and various other, trends progress, Quest's performance could be altered substantially.

Public/private research and funding

Government funding for scientific research is another factor that could impact Quest either positively or negatively. On one hand, there has been an increasing demand for the development of genetic tests, which has led to a correlated increase in federal funding for research in the area. On the other, potential budget cuts and political disagreement regarding ethical issues, such as stem cell research, could put a serious damper on Quest's federally funded innovations.

This idea connects also to the FDA's role in Quest's development process. Unlike in some international markets, Quest's products and services have to meet strict standards to obtain regulatory approval. For example, the HerpesSelect testing procedure has been available in interntional markets for a while but was only recently approved for use in the United States. The FDA has regulatory responsibility over instruments, test kits, reagents, and other devices used to perform diagnostic testing, giving it the power to approve or disapprove essentially all of Quest's sources of revenue. Failure on Quest's part to meet or quickly respond to changes in FDA regulations could harm efficiency and even result in more severe ramifications such as litigation.

Competition Metrics

Quest's major competitor is Laboratory Corporation of America Holdings (LH). The two often actively compete for both market share and contracts, as recently happened in the case of United HealthCare. Another player in the laboratory market is Bio-Reference Laboratories (BRLI), though it is much smaller than the either of the other two main competitors.


  1. ↑ 1.0 1.1 DGX 2009 10-K "Selected Historical Financial Data Of Our Company" pg. 40
Wikinvest © 2006, 2007, 2008, 2009, 2010, 2011, 2012. Use of this site is subject to express Terms of Service, Privacy Policy, and Disclaimer. By continuing past this page, you agree to abide by these terms. Any information provided by Wikinvest, including but not limited to company data, competitors, business analysis, market share, sales revenues and other operating metrics, earnings call analysis, conference call transcripts, industry information, or price targets should not be construed as research, trading tips or recommendations, or investment advice and is provided with no warrants as to its accuracy. Stock market data, including US and International equity symbols, stock quotes, share prices, earnings ratios, and other fundamental data is provided by data partners. Stock market quotes delayed at least 15 minutes for NASDAQ, 20 mins for NYSE and AMEX. Market data by Xignite. See data providers for more details. Company names, products, services and branding cited herein may be trademarks or registered trademarks of their respective owners. The use of trademarks or service marks of another is not a representation that the other is affiliated with, sponsors, is sponsored by, endorses, or is endorsed by Wikinvest.
Powered by MediaWiki