Here's Why Quest Diagnostics (DGX) is a Strong Growth Stock

Quest Diagnostics (DGX) is highlighted by Zacks as a strong growth stock, despite its current Zacks Rank #3 (Hold), attributed to its robust A VGM Score and B Growth Style Score. The company is projected to achieve 9.1% year-over-year earnings growth for the current fiscal year, with nine analysts recently raising their FY2025 earnings estimates to a consensus of $9.74 per share. This positive outlook, coupled with DGX's historical average earnings surprise of +2.1%, positions it as a notable consideration for growth-focused investors.

Analysis

Quest Diagnostics (DGX) exhibits a compelling growth profile despite a neutral Zacks Rank #3 (Hold) rating. The company's fundamental strength is underscored by a top-tier 'A' VGM score and a 'B' for Growth, supported by a forecast for 9.1% year-over-year earnings growth in the current fiscal year. Forward-looking sentiment appears positive, as nine analysts have revised their fiscal 2025 earnings estimates upward over the past 60 days, lifting the consensus estimate to $9.74 per share. This trend of positive revisions, coupled with a history of delivering an average earnings surprise of +2.1%, suggests that while immediate-term catalysts for a stock re-rating may be absent, the underlying financial trajectory and market position are strengthening. The company's established role as a key reference testing provider for approximately half of U.S. hospitals provides a stable operational backbone for this anticipated growth.

Key Decisions for Investors

• Investors should weigh the neutral Zacks #3 'Hold' rank against the strong forward-looking indicators, such as the 9.1% earnings growth forecast and the 'A' grade for the composite VGM score.
• The upward revision of FY2025 earnings estimates by nine separate analysts signals growing consensus and could be a precursor to a future ratings upgrade, warranting close monitoring of the stock.
• Given the combination of a neutral short-term outlook with positive long-term growth signals, growth-oriented investors could consider DGX a candidate for their watchlist, potentially initiating or adding to positions on any market weakness.