NYSE · Healthcare

Quest Diagnostics Incorporated

DGX · Diagnostics & Research

$195.00

▼ -2.76 (-1.4%)

Cached · 10 min

Overall Grade

Defensive

Enterprising

Profitability

B⤢

Gross Profit Margin 32.5%

Operating Margin 14.0%

Net Income Margin 8.7%

Fin. Health

D⤢

Years to Pay Off Debt 25.4 yrs

Working Capital vs Long-Term Debt -$4.8B

Working Capital $389M

Valuation

F⤢

Margin of Safety 0.0%

Price-to-Book 2.93x

Cash Flow

C⤢

Free Cash Flow $164M

CapEx % of Net Income 45.2%

Owner Earnings $513M

Profitability

Gross Profit Margin 32.5%

Revenue minus cost of goods sold. Graham's ≥40% threshold identifies businesses with durable pricing power. Note: software and financial companies naturally exceed this; retailers and manufacturers rarely reach it due to their cost structures.

Operating Margin 14.0%

Profit after operating costs before interest and taxes. A consistent ≥15% operating margin signals a business with real competitive advantages. Capital-intensive industries (airlines, auto, commodities) rarely hit this threshold due to their structural cost base — compare within industry for context.

Net Income Margin 8.7%

Bottom-line profit as a percentage of revenue. The ≥20% target reflects Buffett's preference for highly profitable businesses. Financial engineering (buybacks, tax optimisation) can inflate this temporarily — look for consistency across multiple years rather than a single strong result.

Financial Health

Years to Pay Off Debt 25.4 yrs

Total Debt ÷ Net Income. Lower = stronger balance sheet. Important caveat: utilities, telecoms, REITs, and infrastructure companies carry large structural debt by design — their bond-like cash flows service it comfortably at ratios that would alarm Graham. Compare within sector.

Working Capital vs Long-Term Debt -$4.8B

Working Capital minus Long-Term Debt. Negative results are common and expected in capital-return-focused businesses like Apple, Domino's, and McDonald's — where aggressive buybacks and dividends intentionally reduce book equity. This does not indicate financial distress in high-FCF businesses.

Working Capital $389M

Current Assets minus Current Liabilities. Negative working capital can be a deliberate efficiency strategy in businesses that collect cash before paying suppliers (retailers, fast food franchises, subscription businesses). Assess alongside free cash flow generation for full context.

Cash Flow

Free Cash Flow $164M

Operating cash flow minus capital expenditures. Buffett's most important metric — cash a business actually generates for its owners after maintaining and growing its asset base. Consistently positive FCF is one of the strongest indicators of a durable, well-run business regardless of accounting profits.

CapEx % of Net Income 45.2%

Capital expenditure as a share of net income. Low CapEx signals a capital-light business that doesn't need heavy reinvestment to sustain earnings — Buffett's ideal. High CapEx is structurally necessary in manufacturing, airlines, telecoms, and semiconductors. For these industries, a high reading reflects the business model, not poor management.

Owner Earnings $513M

Net Income + Depreciation & Amortisation − Capital Expenditures. Buffett's preferred measure of a company's true annual earning power — what could theoretically be distributed to owners without impairing the business. More reliable than reported EPS because it accounts for the capital cost of maintaining the business.

Defensive — Graham's strict criteria (P/B, P/E, dividends, stability) · Enterprising — Profitability & cash flow focused, accepts higher valuations for quality

About Quest Diagnostics Incorporated

Quest Diagnostics Incorporated provides diagnostic testing and services in the United States. The company develops and delivers diagnostic information services, such as routine, non-routine and advanced clinical testing, anatomic pathology testing, and other diagnostic information services. It also provides services under the Quest Diagnostics brand, as well as under the AmeriPath, Dermpath Diagnostics, ExamOne, and Quanum brands to physicians, hospitals, patients and consumers, health plans, government agencies, employers, retailers, pharmaceutical companies and insurers commercial clinical laboratories, and accountable care organizations through a network of laboratories, patient service centers, phlebotomists in physician offices, call centers and mobile phlebotomists, nurses, and other health and wellness professionals. In addition, the company offers risk assessment services for the life insurance industry; healthcare IT healthcare providers and payers; testing and medical director services at hospital laboratories; test offerings in cardiometabolic and endocrine; cancer; clinical drug monitoring and toxicology; infectious disease, including autoimmune; neurology diagnostics, including Alzheimer's disease; and women's health, such as prenatal genetic; workplace drug testing, testing urine, hair, and oral fluid specimens services; and employer population health services, including biometric screenings, flu shots, and related preventative services. Further, it provides population health solutions; extended care services; develops in vitro diagnostic tests; laboratory diagnostic information and digital health connectivity systems; underwriting support services, including data gathering, paramedical examinations, and clinical laboratory testing and analytics; and national specimen collection and health data solutions. Quest Diagnostics Incorporated was founded in 1967 and is headquartered in Secaucus, New Jersey.

Market Data

Market Cap $21.6B

Enterprise Value $28.6B

P/E (TTM) 21.55

Dividend Yield 1.65%

Exchange NYSE

Key Margins

Gross Profit 32.5%

Operating Margin 14.0%

Net Margin 8.7%

Company Info

Sector Healthcare

Industry Diagnostics & Research

Employees 57000

Country United States

Visit website

📖

Full Graham Analysis

Mr. Market is currently offering Quest Diagnostics Incorporated at $195.00.

The business passes only 2 of 6 of Graham's defensive criteria — well below his required standard.

At $195.00, the stock trades at a 237% premium to its Graham Number of $57.91. Graham would consider this price speculative.

There is no margin of safety at the current price. Graham would advise patience and waiting for a better entry point.

Negative NCAV — liabilities exceed current assets. Common in capital-return businesses (buybacks, debt-funded dividends) and capital-intensive industries. Not automatically a warning sign..

Conclusion: By Graham's standards, this stock is speculative at its current price. The intelligent investor would look elsewhere or wait.

Showing Key Metrics

Income Highlights

Metric	Q1 2026	Q4 2025
Gross Profit %	32.5%▲	32.4%
Operating Margin %	14.0%▲	13.8%
Net Income %	8.7%▼	8.7%
Diluted EPS	2.24▲	2.18

Balance Sheet Highlights

Metric	Q1 2026	Q4 2025	Q4 2024
Total Assets	$16.7B	$16.2B	N/A
Total Debt	$6.4B▼	$6.6B•	N/A
Working Capital	$389M▲	$100M•	N/A
Years to Pay Debt	25.42	26.88	N/A

Cash Flow Highlights

Metric	Q1 2026	Q4 2025	Q4 2024
Free Cash Flow	$164M▼	$307M•	N/A
Owner Earnings	$513M	$548M	N/A
CapEx % of Net Income	45.2%	64.5%	N/A

Income Statement

	2026	2025
Tax Effect Of Unusual Items	-1,110	0
Tax Rate For Calcs	0	0
Normalized EBITDA	551,000	542,000
Total Unusual Items	-5,000
Total Unusual Items Excluding Goodwill	-5,000
Net Income From Continuing Operation Net Minority Interest	252,000	245,000
Reconciled Depreciation	147,000	145,000
Reconciled Cost Of Revenue	1,843,000	1,788,000
EBITDA	546,000	542,000
EBIT	399,000	397,000
Net Interest Income	-63,000	-64,000
Interest Expense	65,000	67,000
Interest Income	2,000	3,000
Normalized Income	255,890	245,000
Net Income From Continuing And Discontinued Operation	252,000	245,000
Total Expenses	2,491,000	2,420,000
Total Operating Income As Reported	399,000	386,000
Diluted Average Shares	112,000	112,000
Basic Average Shares	110,000	111,000
Diluted EPS	0	0
Basic EPS	0	0
Diluted NI Availto Com Stockholders	251,000	245,000
Net Income Common Stockholders	251,000	245,000
Otherunder Preferred Stock Dividend	1,000	0
Net Income	252,000	245,000
Minority Interests	-12,000	-11,000
Net Income Including Noncontrolling Interests	264,000	256,000
Net Income Continuous Operations	264,000	256,000
Earnings From Equity Interest Net Of Tax	4,000	7,000
Tax Provision	74,000	81,000
Pretax Income	334,000	330,000
Other Income Expense	-7,000	8,000
Other Non Operating Income Expenses	-2,000	8,000
Special Income Charges	-5,000
Restructuring And Mergern Acquisition	5,000
Net Non Operating Interest Income Expense	-63,000	-64,000
Interest Expense Non Operating	65,000	67,000
Interest Income Non Operating	2,000	3,000
Operating Income	404,000	386,000
Operating Expense	538,000	524,000
Other Operating Expenses	2,000	-17,000
Depreciation Amortization Depletion Income Statement	37,000	37,000
Depreciation And Amortization In Income Statement	37,000	37,000
Amortization	37,000	37,000
Amortization Of Intangibles Income Statement	37,000	37,000
Selling General And Administration	499,000	504,000
Gross Profit	942,000	910,000
Cost Of Revenue	1,953,000	1,896,000
Total Revenue	2,895,000	2,806,000
Operating Revenue	2,895,000	2,806,000

Balance Sheet

	2026	2025	2024
Treasury Shares Number	51,000	52,000
Ordinary Shares Number	111,000	110,242
Share Issued	162,000	162,242
Net Debt	5,265,000	5,454,000
Total Debt	6,406,000	6,585,000
Tangible Book Value	-3,471,000	-3,411,000
Invested Capital	13,024,000	13,044,000
Working Capital	389,000	100,000
Net Tangible Assets	-3,471,000	-3,411,000
Capital Lease Obligations	748,000	711,000
Common Stock Equity	7,366,000	7,170,000
Total Capitalization	12,521,000	12,337,000
Total Equity Gross Minority Interest	7,745,000	7,286,000
Minority Interest	379,000	116,000
Stockholders Equity	7,366,000	7,170,000
Gains Losses Not Affecting Retained Earnings	-43,000	-27,000
Other Equity Adjustments	-43,000	-27,000
Treasury Stock	5,091,000	5,180,000
Retained Earnings	10,151,000	9,994,000
Additional Paid In Capital	2,347,000	2,381,000
Capital Stock	2,000	2,000
Common Stock	2,000	2,000
Total Liabilities Net Minority Interest	8,928,000	8,939,000
Total Non Current Liabilities Net Minority Interest	6,751,000	6,661,000
Other Non Current Liabilities	1,022,000	957,000
Long Term Debt And Capital Lease Obligation	5,729,000	5,704,000
Long Term Capital Lease Obligation	574,000	537,000
Long Term Debt	5,155,000	5,167,000
Current Liabilities	2,177,000	2,278,000
Current Debt And Capital Lease Obligation	677,000	881,000
Current Capital Lease Obligation	174,000	174,000
Current Debt	503,000	707,000
Other Current Borrowings	503,000	504,000
Line Of Credit		203,000	162,000
Payables And Accrued Expenses	1,500,000	1,397,000
Current Accrued Expenses		932,000	856,000
Interest Payable		25,000	31,000
Payables		465,000	376,000
Other Payable		51,000	5,000
Dividends Payable		89,000	84,000
Total Tax Payable		18,000	0
Income Tax Payable		18,000	0
Accounts Payable		307,000	287,000
Total Assets	16,673,000	16,225,000
Total Non Current Assets	14,107,000	13,847,000
Other Non Current Assets	256,000	270,000
Investments And Advances	134,000	136,000
Long Term Equity Investment	134,000	136,000
Goodwill And Other Intangible Assets	10,837,000	10,581,000
Other Intangible Assets	1,717,000	1,636,000
Goodwill	9,120,000	8,945,000
Net PPE	2,880,000	2,860,000
Accumulated Depreciation		-3,973,000	-3,658,000
Gross PPE	2,880,000	6,833,000
Construction In Progress		252,000	235,000
Other Properties	2,880,000	657,000
Machinery Furniture Equipment		4,317,000	3,964,000
Buildings And Improvements		629,000	610,000
Land And Improvements		84,000	81,000
Current Assets	2,566,000	2,378,000
Other Current Assets	361,000	361,000
Inventory	225,000	189,000
Receivables	1,587,000	1,408,000
Accounts Receivable	1,587,000	1,408,000
Allowance For Doubtful Accounts Receivable	-27,000	-25,000
Gross Accounts Receivable	1,614,000	1,433,000
Cash Cash Equivalents And Short Term Investments	393,000	420,000
Cash And Cash Equivalents	393,000	420,000

Cash Flow

	2026	2025	2024
Free Cash Flow	164,000	307,000
Repurchase Of Capital Stock		-300,000
Repayment Of Debt	-1,000	-1,000
Issuance Of Debt	0	0
Capital Expenditure	-114,000	-158,000
Interest Paid Supplemental Data	22,000	113,000
Income Tax Paid Supplemental Data	8,000	57,000
End Cash Position	393,000	420,000
Beginning Cash Position	420,000	432,000
Effect Of Exchange Rate Changes	-1,000	1,000
Changes In Cash	-26,000	-13,000
Financing Cash Flow	-152,000	-287,000
Cash Flow From Continuing Financing Activities	-152,000	-287,000
Net Other Financing Charges	-128,000	86,000
Proceeds From Stock Option Exercised	65,000	18,000
Cash Dividends Paid	-88,000	-90,000
Common Stock Dividend Paid	-88,000	-90,000
Net Common Stock Issuance		-300,000
Common Stock Payments		-300,000
Net Issuance Payments Of Debt	-1,000	-1,000
Net Long Term Debt Issuance	-1,000	-1,000
Long Term Debt Payments	-1,000	-1,000
Long Term Debt Issuance	0	0
Investing Cash Flow	-152,000	-191,000
Cash Flow From Continuing Investing Activities	-152,000	-191,000
Net Other Investing Changes		17,000	4,000
Net Business Purchase And Sale	-38,000	-50,000
Purchase Of Business	-38,000	-50,000
Capital Expenditure Reported	-114,000	-158,000
Operating Cash Flow	278,000	465,000
Cash Flow From Continuing Operating Activities	278,000	465,000
Change In Working Capital	-210,000	64,000
Change In Other Working Capital	-31,000	-24,000
Change In Payables And Accrued Expense	1,000	41,000
Change In Payable	1,000	41,000
Change In Account Payable	-12,000	16,000
Change In Tax Payable	13,000	25,000
Change In Income Tax Payable	13,000	25,000
Change In Receivables	-180,000	47,000
Changes In Account Receivables	-180,000	47,000
Other Non Cash Items	8,000	-13,000
Stock Based Compensation	20,000	25,000
Provisionand Write Offof Assets	1,000	1,000
Deferred Tax	48,000	-13,000
Deferred Income Tax	48,000	-13,000
Depreciation Amortization Depletion	147,000	145,000
Depreciation And Amortization	147,000	145,000
Amortization Cash Flow	37,000	37,000
Amortization Of Intangibles	37,000	37,000
Depreciation	110,000	108,000
Net Income From Continuing Operations	264,000	256,000

📊 Quarterly mode — Graham Fair Value & 7 Criteria require annual data. Switch to Annual for full analysis.

Quarter vs Same Quarter Last Year

YoY strips seasonality

Revenue Growth (YoY)

Prior year: $2.7B ▲ $2.9B +9.2%

Revenue growth vs same quarter last year strips seasonality. Consistent double-digit growth is a Buffett hallmark.

Gross Margin

Prior year: 32.5% ▲ 32.5% -0.0pp

Buffett: consistent gross margin above 40% signals durable pricing power and competitive moat.

Operating Margin

Prior year: 15.2% ▲ 14.0% -1.3pp

Graham: operating margin reflects true business economics before financing. Trend matters as much as level.

Net Margin

Prior year: 8.3% ▲ 8.7% +0.4pp

Net margin can be distorted by one-time items, tax timing, or interest costs — compare to operating margin for signal quality.

Quarterly Health Checks

3 Graham/Buffett criteria that are valid and reliable on quarterly data

✅ Adequate Size

Graham required scale for resilience. Quarterly revenue × 4 gives an annualised proxy.

$2.9B/qtr (≈$11.6B ann.)

vs > $1.5B annualised revenue

❌ Financial Condition

Current assets vs current liabilities — a real-time liquidity snapshot. Valid and reliable on quarterly data.

1.18x current ratio

vs ≥ 2.0x

✅ Free Cash Flow

Buffett's most important single metric. A positive FCF quarter means the business generated real cash for owners after maintaining its asset base.

$164M

vs Positive

Operating Cash Flow

$278M

Latest quarter · Buffett's cash reality check

ROIC

2.2%

Based on latest annual operating income

Return on Invested Capital — Buffett's preferred measure for asset-light businesses. ROIC > 15% consistently signals a durable competitive advantage (moat). More meaningful than P/B for software, pharma, and consumer brand companies where most value is intangible and off-balance-sheet.

Market Cap / Net Assets

2.8x

Net Assets: $7.7B

Asset Context — Diagnostics & Research

R&D costs are expensed immediately under GAAP rather than capitalised as assets, meaning a pharma/biotech company's most valuable assets (drug pipeline, patents) are largely invisible on the balance sheet. Net Assets significantly understates true economic value. Pipeline depth and revenue diversification matter more.

Peers & Industry

No auto-detected peers for Diagnostics & Research. You can manually compare DGX against any stock using the Compare tool.

"The management of a business is its most important single factor — more important than market position, patents, or financial structure."

— Benjamin Graham

Capital Allocation & Alignment

Insider Ownership

0.43%

Low — management has little skin in the game

Return on Equity (ROE)

3.4%

Weak — poor returns on equity

Return on Assets (ROA)

1.5%

Poor — assets are not generating adequate returns

Share Buybacks (Latest Year)

$450M

Management is returning capital to shareholders via buybacks

Debt Trend YoY

-2.7% YoY

Debt is declining — management is deleveraging

Leadership Team

James Davis

Chairman, CEO & President

Age 62

Pay: $3,735,745

1.482% of net income

Sam Samad

Executive VP & CFO

Age 55

Pay: $1,486,432

0.590% of net income

Catherine Doherty

Executive Vice President of Regional Businesses

Age 62

Pay: $1,308,396

0.519% of net income

Karthik Kuppusamy Ph.

Senior Vice President of Clinical Solutions

Age 55

Pay: $1,109,447

0.440% of net income

Top Institutional Holders

Institution	% Owned	Shares
Blackrock Inc.	8.29%	9,172,292
Vanguard Capital Management LLC	6.46%	7,145,672
Price (T.Rowe) Associates Inc	5.69%	6,297,987
Vanguard Portfolio Management LLC	5.49%	6,081,400
State Street Corporation	4.86%	5,380,821
Boston Partners	3.62%	4,012,232
JPMORGAN CHASE & CO	3.47%	3,846,456
Geode Capital Management, LLC	2.79%	3,086,308

Risk Analysis

Beta (Market Risk)

0.59

Low volatility — more stable than the market

Short Interest

3.1% of float

Low short interest — market is not heavily bearish

Debt-to-Equity

0.83x

Conservative balance sheet — low financial risk

Current Ratio

1.18x

Adequate liquidity

52-Week Price Range

Low: $164.65 Current: $195.00 High: $213.50

Currently at 62% of 52-week range

Quest Diagnostics Incorporated

Metric Explanations

Full Graham Analysis

Income Highlights

Balance Sheet Highlights

Cash Flow Highlights

Quarter vs Same Quarter Last Year

Quarterly Health Checks

Operating Cash Flow

ROIC

Market Cap / Net Assets

Peers & Industry

Capital Allocation & Alignment

Leadership Team

Top Institutional Holders

Risk Analysis