It has been about a month since the last earnings report for Labcorp Holdings (LH). Shares have added about 8.1% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Labcorp due for a pullback? Well, first let's take a quick look at its most recent earnings report in order to get a better handle on the recent catalysts for Labcorp Holdings Inc. before we dive into how investors and analysts have reacted as of late.
Labcorp Tops Q3 Earnings Estimates
Labcorp Holdings or Labcorp, reported adjusted earnings per share of $4.18 for the third quarter of 2025. The figure rose 19.4% from the year-ago level.
The adjusted figure excludes the impact of certain amortization expenses and restructuring charges, among others. The bottom line beat the Zacks Consensus Estimate by 1.2%.
On a GAAP basis, earnings per share was $3.12 compared with $2.00 in the year-ago period.
Q3 Revenues
Revenues rose 8.6% year over year to $3.56 billion. The figure missed the Zacks Consensus Estimate by 0.01%.
The year-over-year increase was driven by organic revenue growth of 6.2%, acquisitions (net of divestitures) of 1.7% and a foreign currency translation gain of 0.7%.
Following the announcement, Labcorp shares edged down 1.5% in the pre-market session today. This fall can be attributed to the company’s lowered 2025 revenue guidance.
Q3 Performance by Segments
The company currently operates under two segments — Diagnostics Laboratories and Biopharma Laboratory Services (comprised of its Central Laboratories and Early Development Research Laboratories).
For the third quarter, Diagnostics Laboratories reported revenues of $2.77 billion, reflecting an 8.5% improvement year over year.
On an organic basis, revenues were up 6.3%. The company’s total volumes (measured by requisitions) increased 4.7%, as acquisition volumes contributed 1.2% and organic volumes rose 3.5%.
Biopharma Laboratory Services revenues rose 8.3% to $799.1 million in the third quarter. The year-over-year increase was primarily driven by organic growth of 5.3% and a foreign currency translation gain of 3.0%.
Labcorp’s Margin Performance
The gross margin expanded 121 basis points (bps) to 28.8% in the third quarter despite a 6.8% rise in the cost of revenues.
The adjusted operating income improved 40.8% year over year to $472.7 million. The adjusted operating margin expanded 303 bps year over year to 13.3% due to a 2.8% decline in SG&A expenses ($552.4 million).
Labcorp’s Cash Position
Labcorp exited the third quarter with cash and cash equivalents of $598.1 million compared with $647.3 million at the end of the second quarter. Long-term debt totaled $5.08 billion, in line with the second-quarter figure.
Cumulative cash inflow from operating activities at the end of the third quarter was $1.03 billion compared with $808.6 million a year ago.
2025 Guidance
Labcorp updated 2025 full-year guidance to reflect its third-quarter performance and full-year outlook.
Total revenues for 2025 are now expected to grow in the range of 7.4-8.0% (earlier 7.5-8.6%). Diagnostics Laboratories’ revenues are expected to increase in the range of 7.2-7.8% (earlier 7-8%), while Biopharma Laboratory Services’ revenues are now forecasted to be between 5.7% and 7.1% (earlier 6.1% and 7.5%).
The Zacks Consensus Estimate for full-year revenues is pegged at $14.01 billion.
Meanwhile, Labcorp expects full-year adjusted earnings per share to be in the band of $16.15-$16.50 (earlier $16.05-$16.50). The Zacks Consensus Estimate for the metric is pegged at $16.30.
How Have Estimates Been Moving Since Then?
Since the earnings release, investors have witnessed a downward trend in estimates review.
VGM Scores
At this time, Labcorp has a subpar Growth Score of D, however its Momentum Score is doing a lot better with a B. Following the exact same course, the stock was allocated a grade of B on the value side, putting it in the top 40% for value investors.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Labcorp has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Labcorp is part of the Zacks Medical Services industry. Over the past month, Icon PLC (ICLR), a stock from the same industry, has gained 10.7%. The company reported its results for the quarter ended September 2025 more than a month ago.
Icon PLC reported revenues of $2.04 billion in the last reported quarter, representing a year-over-year change of +0.6%. EPS of $3.31 for the same period compares with $3.35 a year ago.
Icon PLC is expected to post earnings of $3.34 per share for the current quarter, representing a year-over-year change of -2.6%. Over the last 30 days, the Zacks Consensus Estimate remained unchanged.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #4 (Sell) for Icon PLC. Also, the stock has a VGM Score of B.
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Labcorp Holdings Inc. (LH): Free Stock Analysis Report ICON PLC (ICLR): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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