Company Reports

As a leading independent diagnostic laboratory, Labcorp participates in a highly attractive duopoly that offers favorable prospects as healthcare moves toward reformed payment models and enjoys a reprieve from scheduled cuts to Medicare reimbursement under the Protecting Access to Medicare Act, and as potentially positive M&A opportunities remain plentiful.

LabCorp delivered second-quarter revenue of $3.73 billion, up 4% organically on solid volume growth and favorable price/mix. Quarterly earnings of $299 million rose 26% year over year thanks to tight control over operating expenses.

LabCorp's first-quarter results included top-line and EBIT growth of 6% and 17%, respectively. Operating margin expanded roughly 110 basis points compared with the prior-year period. Management raised its outlook modestly.

Labcorp reported full-year 2025 revenue growth of 7.2% and an operating margin of 10%, which was a 150-basis-point improvement over 2024.

As a leading independent diagnostic laboratory, Labcorp participates in a highly attractive duopoly that offers favorable prospects as healthcare moves toward reformed payment models, another reprieve from scheduled PAMA cuts to Medicare reimbursement, and potentially positive M&A opportunities remain plentiful.

As a leading independent diagnostic laboratory, Labcorp participates in a highly attractive duopoly that offers favorable prospects as healthcare moves toward reformed payment models, another reprieve from scheduled PAMA cuts to Medicare reimbursement, and potentially positive M&A opportunities remain plentiful.

Labcorp saw third-quarter top-line 9% and operating margin expansion of 340 basis points to 11.1% compared with the prior-year period.

As a leading independent diagnostic laboratory, Labcorp participates in a highly attractive duopoly that offers favorable prospects as healthcare moves toward reformed payment models, Medicare headwinds are again delayed, and potentially positive M&A opportunities remain plentiful.

Labcorp posted second-quarter results with revenue and earnings growth of 10% and 16%, respectively. Material year-over-year gains in gross margin played a major role this quarter. Shares rose about 7% in early trading July 24.

Labcorp reported solid first-quarter results, including 6% revenue growth in constant currency, aided by acquisitions.

Labcorp capped off 2024 in fine fashion, with fourth-quarter top-line growth of 10% year over year, and grew adjusted earnings by 4% year over year.

As a leading independent diagnostic laboratory, Labcorp participates in a highly attractive duopoly that offers favorable prospects as healthcare moves toward reformed payment models, Medicare headwinds are again delayed, and potentially positive M&A opportunities remain plentiful.

Labcorp reported third-quarter top-line growth of 7%, supported by strong organic diagnostic base business growth of 6%. Operating margin remains mildly hampered by the integration of Invitae (genetic testing), but this should ease in the second half of 2025.

Labcorp racked up strong quarterly results that slightly exceeded our expectations, but after minor adjustments to our full-year projections, we’re leaving our fair value estimate unchanged. We’ve incrementally boosted our revenue estimate for 2024 to reflect the strong utilization trends and the addition of recent acquisitions, but the effect was generally offset by slightly lower margins, as its new operations are integrated. We remain confident in Labcorp’s narrow economic moat, where strong medical utilization underscores the company’s cost advantage with more test volume running through its established fixed assets.

As a leading independent diagnostic laboratory, LabCorp participates in a highly attractive duopoly that offers favorable prospects as healthcare moves toward reformed payment models, Medicare headwinds are again delayed, and potentially positive M&A opportunities rise.

Labcorp delivered a solid first-quarter performance that tracked closely with our full-year expectations for the top and bottom lines. We’ve made minimal adjustments to our assumptions and are leaving our fair value estimate unchanged. The strength in medical utilization seen in recent quarters seems to have continued through the first quarter, leading management to raise its outlook for the diagnostic lab business (along with the incorporation of recent acquisition activity). Our projections for 2024 are bounded by management’s revised outlook, and we remain confident of the firm’s narrow economic moat supported by a cost advantage.

Narrow-moat Labcorp posted solid fourth-quarter results, and full-year performance largely fell in line with our expectations. Though cost of goods sold came in slightly higher than expected, this was offset by lower sales and marketing expense; as a result, we’re leaving our fair value estimate unchanged. Fourth-quarter COVID-19 PCR revenue was down 73%, but base business sales more than compensated with 7% growth. As the largest COVID declines are now behind Labcorp, we anticipate 2024 should see generally normalized growth. In keeping with its historical diagnostic focus, the firm continues to prioritize the faster-growing esoteric test areas, including oncology and neurology.

LabCorp delivered third-quarter results that closely track with our full-year topline expectations. Gross margin year-to-date has run slightly behind our projections, but that was partially offset by operational costs, which have run lower than we'd expected. These slight adjustments to our model weren't enough to materially move our $233 fair value estimate. Narrow-moat LabCorp continues to put the COVID-19 disruption in the rearview mirror, and the quarterly decline in pandemic test revenue was comparable to that seen at rival Quest. Perhaps more importantly, LabCorp's non-COVID quarterly test volume and price/mix were up 7% and 9%, respectively, year over year. While some of this strength relied on the new Ascension lab management deal, base business on these measures remained decent on an organic basis. We think this growth suggests solid underlying dynamics for reference labs heading into 2024.

LabCorp delivered solid second-quarter results that offered the first peek into what LabCorp’s financials look like following the spinoff of the Fortrea drug development business. While the remaining biopharma lab services revenue is slightly smaller than we’d expected, this was largely offset by stronger growth in the diagnostic lab segment that we anticipate should continue through the year, as well as a slightly higher long-term earnings growth profile now that the lower-margin drug development business has been shed. As a result, we’re leaving our fair value estimate unchanged. We remain confident in LabCorp’s compelling cost structure that underpins its narrow economic moat. This firm has long been a superior operator in the reference lab industry, in our view. We expect this dynamic to become more evident again as the firm refocuses on diagnostic labs.

We've lowered our fair value estimate on narrow-moat-rated LabCorp to $233 per share, down from $271, after adjusting for the spinoff of the drug development business.