Have you been paying attention to shares of Quest Diagnostics (DGX)? Shares have been on the move with the stock up 14.1% over the past month. The stock hit a new 52-week high of $207.05 in the previous session. Quest Diagnostics has gained 18.3% since the start of the year compared to the 0.9% gain for the Zacks Medical sector and the 9.7% return for the Zacks Medical - Outpatient and Home Healthcare 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 February 10, 2026, Quest Diagnostics reported EPS of $2.42 versus consensus estimate of $2.35 while it beat the consensus revenue estimate by 2.08%.
Valuation Metrics
While Quest Diagnostics 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 they provide investors with an additional way to sort through stocks (beyond looking at the Zacks Rank of a security). The individual style scores for Value, Growth, Momentum and the combined VGM Score run from A through F. The idea behind the style scores is to help investors pick the most appropriate Zacks Rank stocks based on their individual investment style.
Quest Diagnostics has a Value Score of B. The stock's Growth and Momentum Scores are B and B, respectively, giving the company a VGM Score of A.
In terms of its value breakdown, the stock currently trades at 19.7X current fiscal year EPS estimates, which is a premium to the peer industry average of 18.9X. On a trailing cash flow basis, the stock currently trades at 13.5X versus its peer group's average of 18.8X. Additionally, the stock has a PEG ratio of 2.59. 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 consider the stock's Zacks Rank, as this supersedes any trend on the style score front. Fortunately, Quest Diagnostics 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 Quest Diagnostics passes the test. Thus, it seems as though Quest Diagnostics shares could still be poised for more gains ahead.
How Does DGX Stack Up to the Competition?
Shares of DGX 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 DaVita Inc. (DVA). DVA has a Zacks Rank of #1 (Strong Buy) and a Value Score of A, a Growth Score of B, and a Momentum Score of F.
Earnings were strong last quarter. DaVita Inc. beat our consensus estimate by 4.94%, and for the current fiscal year, DVA is expected to post earnings of $14.16 per share on revenue of $14.11 billion.
Shares of DaVita Inc. have gained 33.3% over the past month, and currently trade at a forward P/E of 9.84X and a P/CF of 6.41X.
The Medical - Outpatient and Home Healthcare 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 DGX and DVA, even beyond their own solid fundamental situation.
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Quest Diagnostics Incorporated (DGX): Free Stock Analysis Report DaVita Inc. (DVA): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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