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Laboratory Corp of America Holdings LH

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Stock XNYS Rating as of
$198.32 −9.63 (4.63%)
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As of Cboe BZX Real-Time Price Closed
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Company Report

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Labcorp Earnings: Solid Underlying Demand and New M&A Set Path for Strong 2024

Debbie Wang

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.

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Price vs Fair Value

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LH is trading within a range we consider fairly valued.
Price
$207.97
Fair Value
$738.23
Uncertainty
Medium
1-Star Price
$542.44
5-Star Price
$877.84
Economic Moat
Dpcjl
Capital Allocation
Hzhpmrqz

Bulls Say, Bears Say

Bulls

Now that commercial payers are moving away from exclusive contracts with the large independent labs, we think the prospect of cutthroat pricing competition has eased.

Bears

If significant numbers of hospital-based labs are ill-equipped to comply with Medicare's payment reporting requirements, then reimbursement pressure could increase even more in 2024-26.

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News

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Trading Information

Previous Close Price
$207.95
Day Range
$196.28–204.59
52-Week Range
$179.57–234.03
Bid/Ask
$196.00 / $221.91
Market Cap
$16.68 Bil
Volume/Avg
1.7 Mil / 762,011

Key Statistics

Price/Earnings (Normalized)
14.94
Price/Sales
1.50
Dividend Yield (Trailing)
1.39%
Dividend Yield (Forward)
1.39%
Total Yield
7.08%

Company Profile

Laboratory Corp. of America is one of the nation's two largest independent clinical laboratories, with roughly 20% of the independent lab market. The company operates approximately 2,000 patient-service centers, offering a broad range of 5,000 clinical lab tests, ranging from routine blood and urine screens to complex oncology and genomic testing.
Sector
Healthcare
Industry
Diagnostics & Research
Stock Style Box
Mid Value
Total Number of Employees
67,000
Website
https://www.labcorp.com

Competitors

Valuation

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Metric
LH
MYGN
SHL
Price/Earnings (Normalized)
 14.94—24.89
Price/Book Value
 2.222.141.66
Price/Sales
 1.502.051.52
Price/Cash Flow
 11.65—11.18
Price/Earnings
LH
MYGN
SHL

Financial Strength

Metric
LH
MYGN
SHL
Quick Ratio
 0.821.640.78
Current Ratio
 1.172.010.94
Interest Coverage
 3.85−90.285.95
Quick Ratio
LH
MYGN
SHL

Profitability

Metric
LH
MYGN
SHL
Return on Assets (Normalized)
 6.48%−1.93%4.07%
Return on Equity (Normalized)
 13.21%−2.88%7.01%
Return on Invested Capital (Normalized)
 8.69%−2.33%4.52%
Return on Assets
LH
MYGN
SHL
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