Labcorp Q1 Earnings Preview: Diagnostics Arm Likely to Drive Growth

Labcorp Holdings Inc. LH, or Labcorp, is slated to report its first-quarter 2025 results on April 29, before the opening bell.The renowned laboratory service provider reported adjusted earnings of $3.45 in the last reported quarter, topping the Zacks Consensus Estimate by 1.47%. Labcorp surpassed estimates in each of the trailing four quarters, the average surprise being 3.16%. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)LH’s Q1 EstimatesThe Zacks Consensus Estimate for Labcorp’s first-quarter 2025 revenues is pegged at $3.42 billion. This suggests a 7.6% rise from the year-ago reported figure.The Zacks Consensus Estimate for its first-quarter 2025 EPS is expected to improve by 1.6% to $3.74.Estimate Revision Trend Ahead of Labcorp’s Q1 EarningsEstimates for Labcorp’s first-quarter earnings have dropped 1 cent to $3.74 in the past seven days.Here’s a brief overview of the company’s progress ahead of this announcement.Factors at PlayDiagnostics Laboratories (Dx)The segment likely continued the strong momentum of last year, supported by both organic growth and the strength of acquisitions. Labcorp’s string of partnerships with hospitals, health systems and regional local laboratories is expected to have been instrumental to this growth. As stated earlier, during the first quarter of 2025, the company enhanced access to its diagnostic capabilities through collaboration with Inspira Health. It has also expanded the Raritan, NJ, laboratory.Last year, Labcorp acquired select assets and molecular testing locations of Lab Works in Alabama, and completed the purchase of select outreach laboratory services for Ballad Health in the Appalachian region. Its acquisition of BioReference Health's laboratory testing businesses expanded its clinical diagnostics footprint beyond New York and New Jersey. These developments are expected to have strongly boosted Labcorp’s revenues in the to-be-reported quarter.Labcorp Price and EPS Surprise Labcorp price-eps-surprise | Labcorp QuoteFurthermore, the company might have continued to make notable advances in science, technology and innovations to lead in important therapeutic areas during the to-be-reported quarter. The Invitae acquisition is expected to have bolstered Labcorp’s genetic testing capabilities, particularly in oncology and select rare diseases. In February 2025, it announced the clinical availability of its liquid biopsy test, Labcorp Plasma Complete. Among other recent developments, the company launched a multiple sclerosis monitoring profile to monitor neurofilament light chain serum and GFAP values in multiple sclerosis patients.Labcorp’s first companion diagnostic assay is also now available to identify gastric cancer patients eligible to receive targeted treatment with VYLOY. Additionally, the Labcorp OnDemand platform, which offers a wide range of consumer-initiated wellness tests, is expected to have significantly contributed to the company’s top-line in the first quarter of 2025.The Zacks Consensus Estimate indicates an 8.4% year-over-year increase in the Dx segment’s revenues in the to-be-reported quarter.Biopharma Laboratory Services (BLS)The segment is likely to have benefited from the ongoing strength in the Central Laboratories business, its largest component in the first quarter. Labcorp’s Global Trial Connect suite of digital and data solutions is expected to have seen strong customer adoption, with new enhancements such as improved site workflow efficiency and deeper insights through continued collaboration across sponsors and sites.Similar to the fourth quarter, the company likely saw strong uptake of Labcorp Diagnostics Assistant by health system clients and their physicians, helping bring together lab result data, clinical guidelines and EHR data to inform clinical decisions at the point of care. Additionally, the Early Development unit is expected to have contributed to the 2025 first-quarter revenues, led by improved gross order bookings and cancellations.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 both the segments’ margins to have improved in first-quarter 2025, aiding the overall enterprise margin. In 2024, Labcorp achieved its targeted annual savings of $100-$125 million through its Launchpad initiative, the synergies of which are likely to have aided in managing costs. The Zacks Consensus Estimate implies a 4.3% increase in the adjusted operating income for the Dx business, while the same for the BLS arm indicates a 9% improvement year over year.Earnings Whispers for LabcorpPer 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, which is not the case here, as you can see below:LH’s Earnings ESP: Labcorp has an Earnings ESP of -0.87%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.LH’s Zacks Rank: The company currently carries a Zacks Rank #4 (Sell). You can see the complete list of today’s Zacks #1 Rank stocks here.Top MedTech PicksHere are some medical stocks worth considering, as these have the right combination of elements to post an earnings beat this time:Masimo MASI has an Earnings ESP of +0.64% and a Zacks Rank #1. The company is expected to release first-quarter 2025 results soon. You can see the complete list of today’s Zacks #1 Rank stocks here.MASI’s earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 14.41%. The Zacks Consensus Estimate for the company’s first-quarter EPS is expected to increase 61% from the year-ago quarter figure.Veeva Systems VEEV has an Earnings ESP of +0.17% and a Zacks Rank #1. The company is expected to release first-quarter fiscal 2026 results soon.The company’s earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 7.92%. The Zacks Consensus Estimate for VEEV’s fiscal first-quarter EPS is expected to surge 16% from the year-ago reported figure.Hims & Hers Health HIMS has an Earnings ESP of +115.69% and a Zacks Rank #2. The company is expected to release first-quarter 2025 results soon.HIMS’ earnings surpassed estimates in three of the trailing four quarters and missed on one occasion, the average surprise being 40.42%. The Zacks Consensus Estimate for Hims & Hers Health’s first-quarter EPS is expected to increase by 180% from the year-ago quarter figure.Zacks Names #1 Semiconductor StockIt's only 1/9,000th the size of NVIDIA which skyrocketed more than +800% since we recommended it. NVIDIA is still strong, but our new top chip stock has much more room to boom.With strong earnings growth and an expanding customer base, it's positioned to feed the rampant demand for Artificial Intelligence, Machine Learning, and Internet of Things. Global semiconductor manufacturing is projected to explode from $452 billion in 2021 to $803 billion by 2028.See This Stock Now for Free >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Labcorp (LH): Free Stock Analysis Report Masimo Corporation (MASI): Free Stock Analysis Report Veeva Systems Inc. (VEEV): Free Stock Analysis Report Hims & Hers Health, Inc. (HIMS): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks