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Labcorp Holdings Inc. (LH) Hits Fresh High: Is There Still Room to Run?

By Zacks Equity Research | October 21, 2025, 9:15 AM

A strong stock as of late has been Labcorp Holdings (LH). Shares have been marching higher, with the stock up 4.3% over the past month. The stock hit a new 52-week high of $291.78 in the previous session. Labcorp has gained 26.9% since the start of the year compared to the 1.7% gain for the Zacks Medical sector and the 16.2% return for the Zacks Medical Services industry.

What's Driving the Outperformance?

The stock has a great record of positive earnings surprises, having beaten the Zacks Consensus Estimate in each of the last four quarters. In its last earnings report on July 24, 2025, Labcorp reported EPS of $4.35 versus consensus estimate of $4.14 while it beat the consensus revenue estimate by 1.14%.

For the current fiscal year, Labcorp is expected to post earnings of $16.3 per share on $14.01 in revenues. This represents a 11.87% change in EPS on a 7.68% change in revenues. For the next fiscal year, the company is expected to earn $17.91 per share on $14.7 in revenues. This represents a year-over-year change of 9.88% and 4.91%, respectively.

Valuation Metrics

While Labcorp has moved to its 52-week high in the recent past, investors need to be asking, what is next for the company? A key aspect of this question is taking a look at valuation metrics in order to determine if the company has run ahead of itself.

On this front, we can look at the Zacks Style Scores, as these give investors a variety of ways to comb through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. Investors should consider the style scores a valuable tool that can help you to pick the most appropriate Zacks Rank stocks based on their individual investment style.

Labcorp has a Value Score of B. The stock's Growth and Momentum Scores are B and C, respectively, giving the company a VGM Score of A.

In terms of its value breakdown, the stock currently trades at 17.9X current fiscal year EPS estimates, which is a premium to the peer industry average of 16.9X. On a trailing cash flow basis, the stock currently trades at 13X versus its peer group's average of 10.6X. Additionally, the stock has a PEG ratio of 1.86. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.

Zacks Rank

We also need to look at the Zacks Rank for the stock, as this supersedes any trend on the style score front. Fortunately, Labcorp currently has a Zacks Rank of #2 (Buy) thanks to favorable earnings estimate revisions from covering analysts.

Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if Labcorp meets the list of requirements. Thus, it seems as though Labcorp shares could still be poised for more gains ahead.

How Does LH Stack Up to the Competition?

Shares of LH have been soaring, and the company still appears to be a decent choice, but what about the rest of the industry? One industry peer that looks good is CVS Health Corporation (CVS). CVS has a Zacks Rank of #2 (Buy) and a Value Score of A, a Growth Score of C, and a Momentum Score of B.

Earnings were strong last quarter. CVS Health Corporation beat our consensus estimate by 23.13%, and for the current fiscal year, CVS is expected to post earnings of $6.36 per share on revenue of $392.28 billion.

Shares of CVS Health Corporation have gained 9.8% over the past month, and currently trade at a forward P/E of 12.96X and a P/CF of 9.08X.

The Medical Services industry may rank in the bottom 59% of all the industries we have in our universe, but there still looks like there are some nice tailwinds for LH and CVS, even beyond their own solid fundamental situation.

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Labcorp Holdings Inc. (LH): Free Stock Analysis Report
 
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This article originally published on Zacks Investment Research (zacks.com).

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