Labcorp Holdings Inc. LH, or Labcorp, is slated to report its fourth-quarter 2024 results on Feb. 6 before the opening bell.
Find the latest EPS estimates and surprises on Zacks Earnings Calendar.
The renowned laboratory service provider reported adjusted earnings of $3.50 in the last reported quarter, topping the Zacks Consensus Estimate by 0.56%. Labcorp surpassed estimates in each of the trailing four quarters, the average surprise being 2.87%.
LH’s Q4 Estimates
The Zacks Consensus Estimate for Labcorp’s fourth-quarter 2024 revenues is pegged at $3.31 billion. This suggests a 9.3% rise from the year-ago reported figure.
The Zacks Consensus Estimate for its fourth-quarter 2024 EPS is expected to improve by 3% to $3.40.
Estimate Revision Trend Ahead of Labcorp’s Q4 Earnings
Estimates for Labcorp’s Q4 earnings have remained constant at $3.40 in the past 60 days.
Here’s a brief overview of the company’s progress ahead of this announcement.
Factors at Play
Diagnostics Laboratories (Dx)
The segment is likely to have continued its strong momentum in the fourth quarter of 2024, driven by both organic growth and acquisitions. Labcorp may have furthered its strategic priorities by being the ‘partner of choice’ with health systems and regional local laboratories, allowing enhanced services for patients and providers. In the third quarter of 2024, the company acquired select assets and molecular testing location of Lab Works to expand access to comprehensive testing and laboratory services in Birmingham, AL. Additionally, Labcorp closed the acquisition of select operating assets of Ballad Health outreach lab services.
In September 2024, Labcorp acquired BioReference Health's laboratory testing businesses outside of New York and New Jersey, focusing on clinical diagnostics and reproductive and women's health. Further, its collaboration with Naples Comprehensive Healthcare combines important capabilities, experience and technologies to enhance access to laboratory services. All these are expected to positively impact the company’s revenues in the fourth quarter.
Labcorp Price and EPS Surprise
Labcorp price-eps-surprise | Labcorp Quote
Labcorp is also likely to have continued to innovate and launch new tests in important therapeutic areas by harnessing science, technology and innovation. The Invitae acquisition has bolstered its specialty testing capabilities, enabling the company to use genetic data to improve clinical trials and treatment regimens in oncology and select rare diseases.
By integrating its cutting-edge genetic testing solutions, LH is now able to offer more comprehensive patient insights, covering everything from testing and diagnosis to treatment. In the oncology area, Labcorp’s status as the only provider of FDA-authorized kitted solutions for both tissue and liquid-based solid tumor testing is likely to have secured its competitive edge, contributing to the fourth-quarter top line.
We also expect Labcorp to have gained from its growing consumer-initiated test offerings on the Labcorp OnDemand channel. In October 2024, the company announced an exclusive agreement with NowDiagnostics to distribute the first over-the-counter, point-of-care Syphilis blood test granted marketing authorization by the FDA.
The Zacks Consensus Estimate indicates a 9.4% year-over-year increase in the Dx segment’s revenues in the fourth quarter of 2024.
Biopharma Laboratory Services (BLS)
The segment is likely to have benefited from continued strength in the Central Laboratories business, its largest component. Labcorp’s Global Trial Connect suite digital and data solutions are expected to have seen strong customer adoption, supported by the latest enhancements that aimed for improved site workflow efficiency and facilitated deeper insights through continued collaboration across sponsors and sites. Additionally, the Early Development unit may have witnessed improved gross orders and cancellations, boosting the overall revenues in the fourth quarter of 2024.
According to the Zacks Consensus Estimate, revenues in the BLS segment are likely to improve 7.6% year over year.
From an operational standpoint, we expect Labcorp to have met its targeted annual savings of $100-$125 million through its Launchpad initiative. For the fourth quarter of 2024, the Zacks Consensus Estimate implies an 8.2% increase in the adjusted operating income for the Dx business, while the same for the BLS arm indicates a 12.9% improvement year over year.
Earnings Whispers 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. This is exactly the case here, as you can see below:
Earnings ESP: Labcorp has an Earnings ESP of +0.12%. 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 #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Other Top MedTech Picks
Here are some other medical stocks worth considering, as these also have the right combination of elements to post an earnings beat this time:
Masimo MASI has an Earnings ESP of +4.05% and a Zacks Rank #1. The company is set to release fourth-quarter 2024 results on Feb. 25.
MASI’s earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 17.10%. The Zacks Consensus Estimate for the company’s fourth-quarter EPS is expected to increase 14.4% from the year-ago quarter figure.
Merit Medical Systems MMSI has an Earnings ESP of +3.03% and a Zacks Rank #2. The company is slated to release fourth-quarter 2024 results on Feb. 25.
MMSI’s earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 6.42%. The Zacks Consensus Estimate for Merit Medical’s fourth-quarter EPS is expected to increase 2.47% from the year-ago quarter figure.
Cencora COR has an Earnings ESP of +0.71% and a Zacks Rank #2. The company is set to release first-quarter fiscal 2025 results on Feb. 2.
The company’s earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 2.45%. The Zacks Consensus Estimate for COR’s first-quarter EPS is expected to increase 7% from the year-ago reported figure.
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