Labcorp Holdings Inc. LH, or Labcorp, is slated to report its third-quarter 2024 results on Oct. 24, before the market opens.
The renowned laboratory service provider reported adjusted earnings of $3.94 in the last reported quarter, topping the Zacks Consensus Estimate by 4.23%. Labcorp surpassed estimates in each of the trailing four quarters, the average surprise being 2.80%.
Find the latest EPS estimates and surprises on Zacks Earnings Calendar.
LH’s Q3 Estimates
The Zacks Consensus Estimate for Labcorp’s third-quarter 2024 revenues is pegged at $3.26 billion. This suggests a 6.7% rise from the year-ago reported figure.
The Zacks Consensus Estimate for its third-quarter 2024 EPS is expected to improve by 3.3% to $3.49.
Estimate Revision Trend Ahead of Labcorp’s Q3 Earnings
Estimates for Labcorp’s Q3 earnings have decreased 1.4% to $3.49 in the past 30 days.
Here’s a brief overview of the company’s progress ahead of this announcement.
Factors at Play for LH
Diagnostics Laboratories (Dx)
We anticipate a strong performance from the Dx segment, which made up nearly 78% of Labcorp’s total revenues in the previous quarter. The company is likely to have made strong progress across its strategic growth areas, including maintaining its position as the ‘partner of choice’ for health systems and regional local laboratories. Its collaboration with Naples Comprehensive Healthcare may have helped improve access to testing services for patients in Southwest Florida. The acquisition of Invitae is likely to have boosted the company’s specialty testing capabilities, adding cutting-edge genetic testing solutions for oncology and select rare diseases. These developments are also expected to have boosted LH’s revenues in the to-be-reported quarter.
Additionally, in September, Labcorp closed the acquisition of select assets of BioReference Health — an OPKO Health subsidiary — expanding its laboratory services network and clinical services in key regions across the country. This development may have a partial contribution to the quarter’s performance for LH.
The company is also expected to have significantly benefited from expanding its testing solutions. Earlier this year, it introduced the first clinically validated, whole-genome sequencing MRD (Minimal Residual Disease) solution for early-stage colon cancer, named Labcorp Plasma Detect. In addition, the company received the FDA’s approval for its companion diagnostic to determine patient eligibility for treatment with Pfizer’s gene therapy for hemophilia B. Its trimester screening test to assess preeclampsia risk during pregnancy may have capitalized on being the only of its kind available in the United States, benefiting LH’s top line.
Labcorp Price and EPS Surprise
Labcorp price-eps-surprise | Labcorp Quote
In addition to these, newer strategic service offerings within the precision oncology portfolio, such as Labcorp Tissue Complete, and OmniSeq Insight circulating tumor DNA, are likely to have favored the quarter’s revenues as well. Labcorp’s collaboration with Ultima Genomics may have helped drive improved access to affordable genetic testing in emerging areas with significant unmet needs. Additionally, the launch of PGDx elio plasma focus Dx, which received the FDA’s De Novo Marketing Authorization in August 2024, marked a major step forward for Labcorp’s precision oncology solutions.
In addition, the company likely gained from a growing range of health and wellness tests through its Labcorp OnDemand platform, including standard drug, complete drug comprehensive testosterone and HIV. The Zacks Consensus Estimate indicates an 8% increase in the Dx segment’s revenues in the third quarter of 2024 compared to the last year.
Biopharma Laboratory Services (BLS)
The segment is likely to have given a strong performance driven by the robust Central Laboratories business, its largest component. Labcorp’s new Global Trial Connect suite of central laboratory solutions, designed to accelerate the speed of clinical trials, is expected to have seen a robust adoption by the customers. Besides, the Early Development unit may have exhibited sequential improvement in gross orders and cancellations, favoring the overall revenues in the third quarter of 2024.
According to the Zacks Consensus Estimate, the revenues in the BLS segment are likely to improve 2.2% year over year.
Meanwhile, Labcorp’s Launchpad initiative likely advanced toward its targeted $100 million-$125 million of savings this year, benefiting the margins in both of the segments. The Zacks Consensus Estimate shows a 6.2% increase in the adjusted operating income for the Dx business, while the same for the BLS arm indicates a 1.8% improvement year over year.
Is a Beat on the Cards for Labcorp?
Per our proven model, stocks with a Zacks Rank #1 (Strong Buy), 2 (Buy), or 3 (Hold), along with a positive Earnings ESP, have a higher chance of beating estimates. However, that is not the case here, as you can see below:
Earnings ESP: Labcorp has an Earnings ESP of -1.03%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: The company currently carries a Zacks Rank #3.
Top MedTech Stocks to Consider
Here are some medical stocks worth considering, as these have the right combination of elements to post an earnings beat this time:
ACADIA Pharmaceuticals ACAD has an Earnings ESP of +0.92% and a Zacks Rank #1. The company is expected to release third-quarter 2024 results on Nov. 7. You can see the complete list of today’s Zacks #1 Rank stocks here.
ACAD’s earnings surpassed estimates in three of the trailing four quarters and missed once, with the average surprise being 42.37%. The Zacks Consensus Estimate for the company’s third-quarter EPS is expected to surge 127.5% from the year-ago quarter figure.
RadNet RDNT has an Earnings ESP of +20.00% and a Zacks Rank #2. The company is expected to release third-quarter 2024 results on Nov. 13.
RDNT’s earnings surpassed estimates in three of the trailing four quarters and broke even once, with the average surprise being 98.23%. The Zacks Consensus Estimate for RadNet’s third-quarter EPS is expected to increase by 21.4% from the year-ago quarter figure.
Masimo MASI has an Earnings ESP of +0.40% and a Zacks Rank #2. The company is likely to release third-quarter 2024 results on Nov. 5.
The company’s earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 14.63%. The Zacks Consensus Estimate for MASI’s 2024 third-quarter EPS is expected to improve 33.3% from the year-ago reported figure.
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