Quest Diagnostics (DGX) Expands Kidney Testing Access, Is The Stock Fully Priced?

Renalytix PLC’s new multi year agreement with Quest Diagnostics (DGX) to offer kidneyintelX.dkd testing across Quest’s national network gives investors fresh information on how the company is approaching specialty kidney diagnostics access.

Quest Diagnostics’ agreement with Renalytix follows a busy period, with new Alzheimer’s related AD-Detect tests and the Humanity Biological Age wellness offering both announced in late August. Despite a 1 day share price decline of 1.70% and a 7 day share price return of negative 3.39%, the 90 day share price return of 21.97% and 1 year total shareholder return of 34.51% show that performance has been positive over both the recent and multi year period.

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Quest Diagnostics has been on a strong multi year run, yet the latest pullback and the new kidney and Alzheimer’s testing agreements change the picture. Does buying Quest Diagnostics at around US$236 make more sense now than waiting for a cheaper entry later?

Most Popular Narrative: 3.9% Undervalued

Quest Diagnostics closed at $236.22, while the most followed narrative centers on a fair value of about $245.87. That puts current pricing slightly below the narrative view and frames the new kidney and Alzheimer’s testing agreements within a wider earnings story.

The rising importance of health data analytics and Quest's role as a "lab engine" for consumer wellness brands positions the company to benefit from new revenue streams and further monetization opportunities as healthcare becomes more data-driven, supporting long-term earnings power.

Read the complete narrative. Read the complete narrative.

Want to understand why this fair value sits ahead of today’s price? The narrative leans heavily on steadier revenue growth, firmer margins, and a future earnings profile that assumes a tighter share count and a premium earnings multiple.

Result: Fair Value of $245.87 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, investors still need to watch for tighter reimbursement under PAMA, as well as rising wage and automation costs, which could pressure Quest Diagnostics’ margins and earnings narrative.

Find out about the key risks to this Quest Diagnostics narrative.

Next Steps

Given the mixed signals around Quest Diagnostics today, it makes sense to move quickly, review the full picture yourself, and weigh both sides using the 4 key rewards and 1 important warning sign.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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