Quest Diagnostics Incorporated
Quest Diagnostics Incorporated Fundamental Analysis
Quest Diagnostics Incorporated (DGX) shows moderate financial fundamentals with a PE ratio of 21.09, profit margin of 9.08%, and ROE of 14.11%. The company generates $11.3B in annual revenue with strong year-over-year growth of 11.78%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 64.1/100 based on profitability, valuation, growth, and balance sheet metrics. The C+ grade reflects average fundamentals, with notable risks in certain areas.
Fundamental Health Score
We analyze DGX's fundamental strength across five key dimensions:
Efficiency Score
WeakDGX struggles to generate sufficient returns from assets.
Valuation Score
ExcellentDGX trades at attractive valuation levels.
Growth Score
ExcellentDGX delivers strong and consistent growth momentum.
Financial Health Score
ExcellentDGX maintains a strong and stable balance sheet.
Profitability Score
WeakDGX struggles to sustain strong margins.
Key Financial Metrics
Is DGX Expensive or Cheap?
P/E Ratio
DGX trades at 21.09 times earnings. This indicates a fair valuation.
PEG Ratio
When adjusting for growth, DGX's PEG of 1.46 indicates fair valuation.
Price to Book
The market values Quest Diagnostics Incorporated at 2.93 times its book value. This may indicate undervaluation.
EV/EBITDA
Enterprise value stands at 7.65 times EBITDA. This is generally considered low.
How Well Does DGX Make Money?
Net Profit Margin
For every $100 in sales, Quest Diagnostics Incorporated keeps $9.08 as profit after all expenses.
Operating Margin
Core operations generate 14.31 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $14.11 in profit for every $100 of shareholder equity.
ROA
Quest Diagnostics Incorporated generates $6.14 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
Quest Diagnostics Incorporated produces operating cash flow of $1.86B, showing steady but balanced cash generation.
Free Cash Flow
Quest Diagnostics Incorporated generates strong free cash flow of $1.33B, providing ample flexibility for dividends, buybacks, or growth.
FCF Per Share
Each share generates $12.05 in free cash annually.
FCF Yield
DGX converts 6.11% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
21.09
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
1.46
vs 25 benchmark
P/B Ratio
Price to book value ratio
2.93
vs 25 benchmark
P/S Ratio
Price to sales ratio
1.93
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
0.95
vs 25 benchmark
Current Ratio
Current assets to current liabilities
1.18
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.14
vs 25 benchmark
ROA
Return on assets percentage
0.06
vs 25 benchmark
ROCE
Return on capital employed
0.11
vs 25 benchmark
How DGX Stacks Against Its Sector Peers
| Metric | DGX Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 21.09 | 28.81 | Better (Cheaper) |
| ROE | 14.11% | 643.00% | Weak |
| Net Margin | 9.08% | -44312.00% (disorted) | Weak |
| Debt/Equity | 0.95 | 0.36 | Weak (High Leverage) |
| Current Ratio | 1.18 | 4.50 | Neutral |
| ROA | 6.14% | -17799.00% (disorted) | Weak |
DGX outperforms its industry in 1 out of 6 key metrics, but lagging in ROE.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews Quest Diagnostics Incorporated's 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
41.16%
Industry Style: Defensive, Growth, Innovation
High GrowthEPS CAGR
-16.31%
Industry Style: Defensive, Growth, Innovation
DecliningFCF CAGR
13.56%
Industry Style: Defensive, Growth, Innovation
High Growth