The end of the earnings season is always a good time to take a step back and see who shined (and who not so much). Let’s take a look at how testing & diagnostics services stocks fared in Q4, starting with RadNet (NASDAQ: RDNT).
The testing and diagnostics services industry plays a crucial role in disease detection, monitoring, and prevention, serving hospitals, clinics, and individual consumers. This sector benefits from stable demand, driven by an aging population, increased prevalence of chronic diseases, and growing awareness of preventive healthcare. Recurring revenue streams come from routine screenings, lab tests, and diagnostic imaging, with reimbursement from Medicare, Medicaid, private insurance, and out-of-pocket payments. However, the industry faces challenges such as pricing pressures, regulatory compliance, and the need for continuous investment in new testing technologies. Looking ahead, industry tailwinds include the expansion of personalized medicine, increased adoption of at-home and rapid diagnostic tests, and advancements in AI-driven diagnostics that enhance accuracy and efficiency. However, headwinds such as reimbursement uncertainties, competition from decentralized testing solutions, and regulatory scrutiny over test validity and cost-effectiveness may impact profitability. Adapting to evolving healthcare models and integrating automation will be key for sustaining growth and maintaining operational efficiency.
The 5 testing & diagnostics services stocks we track reported a satisfactory Q4. As a group, revenues beat analysts’ consensus estimates by 2.1%.
Amidst this news, share prices of the companies have had a rough stretch. On average, they are down 8.4% since the latest earnings results.
Best Q4: RadNet (NASDAQ: RDNT)
With over 350 imaging facilities across seven states and a growing artificial intelligence division, RadNet (NASDAQ: RDNT) operates a network of outpatient diagnostic imaging centers across the United States, offering services like MRI, CT scans, PET scans, mammography, and X-rays.
RadNet reported revenues of $477.1 million, up 13.5% year on year. This print exceeded analysts’ expectations by 4.2%. Overall, it was a strong quarter for the company with an impressive beat of analysts’ same-store sales and EPS estimates.
Dr. Howard Berger, President and Chief Executive Officer of RadNet, commented, “I am very pleased with our performance in the fourth quarter and for full-year 2024. Relative to last year’s fourth quarter, Revenue increased 13.5% and Adjusted EBITDA(1) increased 14.0%. This performance was driven by strong aggregate procedural volume growth of 8.0% and same center procedural growth of 4.0%. This performance enabled us to meet or exceed guidance levels we set at the beginning of 2024 and revised upward throughout the year.”
RadNet delivered the weakest full-year guidance update of the whole group. The stock is down 12.8% since reporting and currently trades at $50.21.
Is now the time to buy RadNet? Access our full analysis of the earnings results here, it’s free.
Quest (NYSE: DGX)
Processing approximately one-third of the adult U.S. population's lab tests annually, Quest Diagnostics (NYSE: DGX) provides laboratory testing and diagnostic information services to patients, physicians, hospitals, and other healthcare providers across the United States.
Quest reported revenues of $2.62 billion, up 14.6% year on year, outperforming analysts’ expectations by 1.8%. The business had a strong quarter with a narrow beat of analysts’ sales volume estimates and a decent beat of analysts’ EPS estimates.
The market seems happy with the results as the stock is up 6.9% since reporting. It currently trades at $166.
Is now the time to buy Quest? Access our full analysis of the earnings results here, it’s free.
Weakest Q4: Guardant Health (NASDAQ: GH)
Pioneering the field of "liquid biopsy" with technology that can identify cancer-specific genetic mutations from a simple blood draw, Guardant Health (NASDAQ: GH) develops blood tests that detect and monitor cancer by analyzing tumor DNA in the bloodstream, helping doctors make treatment decisions without invasive biopsies.
Guardant Health reported revenues of $201.8 million, up 30.2% year on year, exceeding analysts’ expectations by 4.8%. Still, it was a mixed quarter as it posted a significant miss of analysts’ EPS estimates.
The stock is flat since the results and currently trades at $47.90.
Read our full analysis of Guardant Health’s results here.
Labcorp (NYSE: LH)
With over 600 million tests performed annually and involvement in 90% of FDA-approved drugs in 2023, Labcorp (NYSE: LH) provides laboratory testing services and drug development solutions to doctors, hospitals, pharmaceutical companies, and patients worldwide.
Labcorp reported revenues of $3.33 billion, up 9.8% year on year. This print beat analysts’ expectations by 0.6%. More broadly, it was a satisfactory quarter as it also produced full-year revenue guidance slightly topping analysts’ expectations.
Labcorp achieved the highest full-year guidance raise but had the slowest revenue growth among its peers. The stock is down 6% since reporting and currently trades at $234.89.
Read our full, actionable report on Labcorp here, it’s free.
NeoGenomics (NASDAQ: NEO)
Operating a network of CAP-accredited and CLIA-certified laboratories across the United States and United Kingdom, NeoGenomics (NASDAQ: NEO) provides specialized cancer diagnostic testing services, including genetic analysis, molecular testing, and pathology consultation for oncologists and healthcare providers.
NeoGenomics reported revenues of $172 million, up 10.6% year on year. This number missed analysts’ expectations by 1%. Aside from that, it was a satisfactory quarter as it put up an impressive beat of analysts’ EPS estimates.
NeoGenomics had the weakest performance against analyst estimates among its peers. The stock is down 31% since reporting and currently trades at $9.96.
Read our full, actionable report on NeoGenomics here, it’s free.
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