What Happened?
Shares of healthcare diagnostics company Labcorp Holdings (NYSE: LH) fell 3.8% in the morning session after the company's third-quarter results, while beating headline estimates, revealed a miss on a key profitability metric and included guidance that failed to impress investors. The healthcare diagnostics company reported revenue of $3.56 billion, in line with Wall Street expectations, and an adjusted profit of $4.18 per share, which was 1% above consensus. However, investors looked past the top- and bottom-line beats to focus on other details. The company's adjusted EBITDA of $596.8 million missed analyst estimates. Furthermore, while Labcorp slightly raised its full-year adjusted earnings per share guidance, the modest revision appeared to underwhelm the market, which was likely anticipating a more robust outlook.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy Labcorp? Access our full analysis report here.
What Is The Market Telling Us
Labcorp’s shares are not very volatile and have only had 3 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was 3 months ago when the stock gained 6.8% on the news that the company reported second-quarter earnings that beat analyst expectations and raised its full-year financial outlook. The laboratory network operator posted an adjusted EPS of $4.35, which surpassed consensus estimates. Revenue for the quarter increased 9.5% year-over-year to $3.53 billion, driven by growth in both its Diagnostics and Biopharma segments. In a significant show of confidence, Labcorp boosted its full-year 2025 guidance, projecting adjusted earnings per share between $16.05 and $16.50 and revenue growth between 7.5% and 8.6%. The company also noted that it had repurchased $200 million of its common stock during the quarter, further underscoring the strength of its financial position and business performance.
Labcorp is up 15.5% since the beginning of the year, but at $263.50 per share, it is still trading 9.4% below its 52-week high of $290.93 from October 2025. Investors who bought $1,000 worth of Labcorp’s shares 5 years ago would now be looking at an investment worth $1,292.
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