Quest Diagnostics Incorporated (DGX) DCF Valuation
TGM's two-stage DCF values Quest Diagnostics Incorporated (DGX) between $103.73 and $233.32 depending on assumptions, with a base case of $147.58. Growth is taken from the company's own record (5-year revenue CAGR (FCF growth too volatile to use) (floored at 2%)), fading to 2.5% long-run; the discount rate (7.5%) reflects its beta.
What would today's price require?
$206.24 is justified only if free cash flow grows about +8.0% a year (fading to 2.5% long-run) at a 7.5% required return — faster than the company has actually grown.
| Scenario | FCF growth (fading to 2.5%) | Discount | Value / share |
|---|---|---|---|
| Conservative | 0.5%/yr | 8.5% | $103.73 |
| Base case | 2.0%/yr | 7.5% | $147.58 |
| Optimistic | 5.0%/yr | 6.5% | $233.32 |
| Analyst DCF (FMP) | independent reference — different model | $224.55 | |
Current Price
$206.24
Market-Implied Growth
+8.0%/yr
vs -8.5% 5Y actual
Model Scenario Range
$103.73 – $233.32
model output — not a price target
DGX DCF Fair Value Calculator
Edit the assumptions to see how they change the estimated fair value. Opens seeded with TGM's data-driven base case for DGX (growth from its own 5-year record, discount from its beta), so the sandbox starts where the scenarios above leave off. Illustrative model — not investment advice.
Base inputs: FCF $1.1B · 0.11B shares · net debt $6.0B
Estimated Fair Value
$143.96
-30.2% vs $206.24
Sensitivity — fair value by discount rate × terminal growth
How the estimated fair value shifts with the discount rate (WACC) and terminal growth, holding your 2.0%/yr FCF growth and 10-year horizon fixed. Green = above today's $206.24; red = below. Your current case is outlined.
| WACC ↓ / Terminal → | 1.50% | 2.00% | 2.50% | 3.00% | 3.50% |
|---|---|---|---|---|---|
| 5.5% | $212 | $239 | $275 | $325 | $401 |
| 6.5% | $158 | $174 | $193 | $218 | $251 |
| 7.5% | $123 | $132 | $144 | $158 | $176 |
| 8.5% | $97.25 | $104 | $111 | $120 | $131 |
| 9.5% | $78.19 | $82.70 | $87.85 | $93.79 | $101 |
About Quest Diagnostics Incorporated
Quest Diagnostics Incorporated, founded in 1967 and headquartered in Secaucus, New Jersey, is a premier provider of diagnostic testing, information, and related services, serving clients both domestically and internationally. Its core business involves the development and provision of diverse diagnostic information services, such as routine, advanced clinical, and anatomic pathology testing. While primarily operating under the Quest Diagnostics brand, it also leverages specialized identities like AmeriPath, Dermpath Diagnostics, ExamOne, and Quanum to reach a broad spectrum of clients. Its extensive client base includes patients, clinicians, hospitals, integrated delivery networks, health plans, employers, and other direct healthcare entities. Delivery of these services is facilitated through a robust network comprising laboratories, patient service centers, in-office phlebotomists, call centers, and mobile health professionals including paramedics and nurses. Additionally, the company provides risk assessment services for the life insurance industry and offers comprehensive information technology solutions to healthcare organizations and clinicians.
- Sector
- Healthcare
- Industry
- Medical - Diagnostics & Research
- CEO
- James E. Davis