Quest Diagnostics (DGX): Revisiting Valuation After New Multiple Sclerosis Testing Partnership With Octave Bioscience

Quest Diagnostics (DGX) just deepened its neurological testing ambitions through a new collaboration with Octave Bioscience, giving nationwide access to Octave’s multiple sclerosis disease activity blood test via Quest’s 7,000 collection sites.

See our latest analysis for Quest Diagnostics.

That strategic push into neurology comes as sentiment around Quest has been quietly improving, with the share price at $182.56 and a strong year to date share price return of 20.93 percent, backed by a 5 year total shareholder return of 67.33 percent. This signals that long term compounding is intact even as near term swings remain modest.

If this kind of steady, healthcare focused growth story appeals to you, it is worth exploring other potential opportunities across healthcare stocks to see what else fits your watchlist.

With revenue and earnings still growing, and the stock trading at a discount to both intrinsic value estimates and analyst targets, is Quest a quietly undervalued compounder, or has the market already baked in the next leg of growth?

Most Popular Narrative Narrative: 7.5% Undervalued

With the narrative fair value sitting above the recent $182.56 close, the current price implies investors are not fully paying for Quest’s projected earnings power yet.

The rising importance of health data analytics and Quest's role as a "lab engine" for consumer wellness brands positions the company to benefit from new revenue streams and further monetization opportunities as healthcare becomes more data-driven, supporting long-term earnings power.

Read the complete narrative.

Curious how modest looking growth assumptions, a richer margin profile, and a slightly lower future earnings multiple still point to upside? The narrative stitches these levers into a detailed path from today’s profits to a higher long term earnings base, then discounts it back using a precise hurdle rate. Want to see exactly how those moving parts combine into that fair value range?

Result: Fair Value of $197.31 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, this upside depends on reimbursement staying supportive and wage or modernization cost pressures not eroding the margin gains analysts are banking on.

Find out about the key risks to this Quest Diagnostics narrative.

Build Your Own Quest Diagnostics Narrative

If you want to dig into the numbers yourself or challenge this outlook, you can build a personalized view in just minutes: Do it your way.

A great starting point for your Quest Diagnostics research is our analysis highlighting 4 key rewards and 1 important warning sign that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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