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What Awaits Quest Diagnostics (DGX) in Q2 Earnings Release?
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Quest Diagnostics (DGX - Free Report) is set to release second-quarter 2024 results on Jul 23 before the opening bell.
The medical diagnostic testing provider posted adjusted earnings per share (EPS) of $2.04 in the last reported quarter, which surpassed the Zacks Consensus Estimate by 9.68%. The company topped earnings estimates in each of the trailing four quarters, the average surprise being 3.67%.
Q2 Estimates
For the second quarter of 2024, the Zacks Consensus Estimate for Quest Diagnostics’ revenues is pegged at $2.38 billion, an increase of 1.9% from the year-ago reported figure.
The Zacks Consensus Estimate for the company’s second-quarter 2024 EPS is $2.30, similar to the year-ago reported figure.
Estimate Revision Trend Ahead of Earnings
Estimates for Quest Diagnostics’ Q2 earnings have remained unchanged at $2.30 per share in the past 30 days.
Let’s take a brief look at the company’s performance leading up to this announcement.
Factors at Play
Quest Diagnostics’ legacy base business is likely to have sustained the strong momentum of recent quarters. The DIS (Diagnostic Information Services) segment, which provides clinical testing and other services to a broad range of customers, is expected to be the major contributor to this growth. The division generated nearly 95% of the total net revenues in the first quarter.
In the second quarter of 2024, Physician Lab Services may have benefitted from the ongoing high healthcare utilization, market expansion and increased shares. Quest Diagnostics’ broad health plan access is expected to largely drive success across the physician channel. Following the renegotiations of all the large health plan contracts last year, more than half of its health plan revenues are now tied to value-based incentives.
Furthermore, new customer wins, stronger ties with a variety of physician practices and the recent addition of a New York-based independent lab, Lenco, may have also contributed to the growth.
Quest Diagnostics Incorporated Price and EPS Surprise
In Hospital Lab Services, we expect the company to report strong base business growth, driven by its reference testing business, which has been growing faster than pre-pandemic trends. Base revenues from the consumer-initiated tests offered through QuestHealth.com. may have been robust in the to-be-reported quarter, led by popular categories like general health panels, STDs and tuberculosis testing, as well as the new PFAS (regarded as "forever chemicals") tests. This is expected to aid DGX’s overall revenues as well.
Over the past few quarters, Advanced Diagnostics has delivered remarkable performance across several key clinical areas, such as brain health, women's health, prenatal and hereditary genetics and advanced cardiometabolic health. We anticipate this favorable trend to have continued in the second quarter of 2024. Growth in brain health may have been supported by the company’s comprehensive Alzheimer's disease (AD) tests offering and the CSF (cerebrospinal fluid) tests for diagnosing and monitoring.
In addition, Quest Diagnostics expanded the AD-Detect portfolio of blood tests with a new blood biomarker for p-tau217 (phosphorylated tau 217). Through robust investments in cancer screening, treatment selection and monitoring, DGX may have bolstered its position in the MRD space and other fast-growth molecular genomics and oncology markets. These efforts are likely to have positively boosted its revenues in the second quarter of 2024.
Furthermore, Quest Diagnostics’ Invigorate initiative is likely to have helped offset the cost headwinds in the quarter under review, enhancing the margin performance. The company may have continued to deploy automation and AI to improve productivity, as well as service levels and quality.
Our model forecasts that DGX’s cost of services will drop 1.7% sequentially in the second quarter, resulting in a 5% increase in the gross profit. Other performance indicators, such as operating income and EBITDA (both on a non-GAAP basis), are likely to improve 13% and 10.8%, respectively, from the first quarter.
Added to this, Quest Diagnostics has a solid M&A pipeline. Earlier in April, the company teamed up with Broad Clinical Labs to evaluate the clinical value of WGS (whole-genome sequencing) as a first-line genetic test for postnatal diagnosis of developmental delay disorders. Strategic moves like this are likely to have positively boosted the company’s revenues in the second quarter of 2024.
Meanwhile, the continued reduction of COVID-19 testing revenues has been a major challenge for the DIS business for several quarters, affecting some of its key measures. We expect this unfavorable trend to likely have been a drag on the segment’s 2024 second-quarter performance and damped its growth potential.
Per our model, DIS revenues for the second quarter suggest a 2% improvement from the year-ago quarter’s reported figure.
What Our Model Suggests
Per our proven model, a stock with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold), along with a positive Earnings ESP, has a higher chance of beating estimates, which is not the case here, as you can see.
Earnings ESP: Quest Diagnostics has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: The company currently carries a Zacks Rank #3.
Stocks Worth a Look
Here are some medical stocks worth considering, as these have the right combination of elements to post an earnings beat this time:
HIMS’ earnings surpassed estimates in three of the trailing four quarters and missed once, with the average surprise being 79.17%. The Zacks Consensus Estimate for the company’s second-quarter EPS is expected to surge 266.7% from the year-ago quarter figure.
HCA Healthcare (HCA - Free Report) has an Earnings ESP of +7.10% and a Zacks Rank #2. The company is slated to release second-quarter 2024 results on Jul 23.
HCA’s earnings surpassed estimates in three of the trailing four quarters, with the average surprise being 5.64%. The Zacks Consensus Estimate for HCA Healthcare’s second-quarter EPS is expected to surge 15.9% from the year-ago quarter figure.
Enovis (ENOV - Free Report) has an Earnings ESP of +3.70% and a Zacks Rank #2. The company is likely to release second-quarter 2024 results on Aug 1.
The company’s earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 6.18%. The Zacks Consensus Estimate for ENOV’s 2024 second-quarter EPS is expected to improve 24.1% from the year-ago reported figure.
Image: Bigstock
What Awaits Quest Diagnostics (DGX) in Q2 Earnings Release?
Quest Diagnostics (DGX - Free Report) is set to release second-quarter 2024 results on Jul 23 before the opening bell.
The medical diagnostic testing provider posted adjusted earnings per share (EPS) of $2.04 in the last reported quarter, which surpassed the Zacks Consensus Estimate by 9.68%. The company topped earnings estimates in each of the trailing four quarters, the average surprise being 3.67%.
Q2 Estimates
For the second quarter of 2024, the Zacks Consensus Estimate for Quest Diagnostics’ revenues is pegged at $2.38 billion, an increase of 1.9% from the year-ago reported figure.
The Zacks Consensus Estimate for the company’s second-quarter 2024 EPS is $2.30, similar to the year-ago reported figure.
Estimate Revision Trend Ahead of Earnings
Estimates for Quest Diagnostics’ Q2 earnings have remained unchanged at $2.30 per share in the past 30 days.
Let’s take a brief look at the company’s performance leading up to this announcement.
Factors at Play
Quest Diagnostics’ legacy base business is likely to have sustained the strong momentum of recent quarters. The DIS (Diagnostic Information Services) segment, which provides clinical testing and other services to a broad range of customers, is expected to be the major contributor to this growth. The division generated nearly 95% of the total net revenues in the first quarter.
In the second quarter of 2024, Physician Lab Services may have benefitted from the ongoing high healthcare utilization, market expansion and increased shares. Quest Diagnostics’ broad health plan access is expected to largely drive success across the physician channel. Following the renegotiations of all the large health plan contracts last year, more than half of its health plan revenues are now tied to value-based incentives.
Furthermore, new customer wins, stronger ties with a variety of physician practices and the recent addition of a New York-based independent lab, Lenco, may have also contributed to the growth.
Quest Diagnostics Incorporated Price and EPS Surprise
Quest Diagnostics Incorporated price-eps-surprise | Quest Diagnostics Incorporated Quote
In Hospital Lab Services, we expect the company to report strong base business growth, driven by its reference testing business, which has been growing faster than pre-pandemic trends. Base revenues from the consumer-initiated tests offered through QuestHealth.com. may have been robust in the to-be-reported quarter, led by popular categories like general health panels, STDs and tuberculosis testing, as well as the new PFAS (regarded as "forever chemicals") tests. This is expected to aid DGX’s overall revenues as well.
Over the past few quarters, Advanced Diagnostics has delivered remarkable performance across several key clinical areas, such as brain health, women's health, prenatal and hereditary genetics and advanced cardiometabolic health. We anticipate this favorable trend to have continued in the second quarter of 2024. Growth in brain health may have been supported by the company’s comprehensive Alzheimer's disease (AD) tests offering and the CSF (cerebrospinal fluid) tests for diagnosing and monitoring.
In addition, Quest Diagnostics expanded the AD-Detect portfolio of blood tests with a new blood biomarker for p-tau217 (phosphorylated tau 217). Through robust investments in cancer screening, treatment selection and monitoring, DGX may have bolstered its position in the MRD space and other fast-growth molecular genomics and oncology markets. These efforts are likely to have positively boosted its revenues in the second quarter of 2024.
Furthermore, Quest Diagnostics’ Invigorate initiative is likely to have helped offset the cost headwinds in the quarter under review, enhancing the margin performance. The company may have continued to deploy automation and AI to improve productivity, as well as service levels and quality.
Our model forecasts that DGX’s cost of services will drop 1.7% sequentially in the second quarter, resulting in a 5% increase in the gross profit. Other performance indicators, such as operating income and EBITDA (both on a non-GAAP basis), are likely to improve 13% and 10.8%, respectively, from the first quarter.
Added to this, Quest Diagnostics has a solid M&A pipeline. Earlier in April, the company teamed up with Broad Clinical Labs to evaluate the clinical value of WGS (whole-genome sequencing) as a first-line genetic test for postnatal diagnosis of developmental delay disorders. Strategic moves like this are likely to have positively boosted the company’s revenues in the second quarter of 2024.
Meanwhile, the continued reduction of COVID-19 testing revenues has been a major challenge for the DIS business for several quarters, affecting some of its key measures. We expect this unfavorable trend to likely have been a drag on the segment’s 2024 second-quarter performance and damped its growth potential.
Per our model, DIS revenues for the second quarter suggest a 2% improvement from the year-ago quarter’s reported figure.
What Our Model Suggests
Per our proven model, a stock with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold), along with a positive Earnings ESP, has a higher chance of beating estimates, which is not the case here, as you can see.
Earnings ESP: Quest Diagnostics has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: The company currently carries a Zacks Rank #3.
Stocks Worth a Look
Here are some medical stocks worth considering, as these have the right combination of elements to post an earnings beat this time:
Hims & Hers Health (HIMS - Free Report) has an Earnings ESP of +19.28% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.The company is expected to release second-quarter 2024 results on Aug 5.
HIMS’ earnings surpassed estimates in three of the trailing four quarters and missed once, with the average surprise being 79.17%. The Zacks Consensus Estimate for the company’s second-quarter EPS is expected to surge 266.7% from the year-ago quarter figure.
HCA Healthcare (HCA - Free Report) has an Earnings ESP of +7.10% and a Zacks Rank #2. The company is slated to release second-quarter 2024 results on Jul 23.
HCA’s earnings surpassed estimates in three of the trailing four quarters, with the average surprise being 5.64%. The Zacks Consensus Estimate for HCA Healthcare’s second-quarter EPS is expected to surge 15.9% from the year-ago quarter figure.
Enovis (ENOV - Free Report) has an Earnings ESP of +3.70% and a Zacks Rank #2. The company is likely to release second-quarter 2024 results on Aug 1.
The company’s earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 6.18%. The Zacks Consensus Estimate for ENOV’s 2024 second-quarter EPS is expected to improve 24.1% from the year-ago reported figure.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.