Since November 2025, Quest has been in a holding pattern, posting a small return of 2.6% while floating around $194.06. The stock also fell short of the S&P 500’s 9.8% gain during that period.
Is there a buying opportunity in Quest, or does it present a risk to your portfolio? See what our analysts have to say in our full research report, it’s free.
Why Is Quest Not Exciting?
We’re cautious about Quest. Here are three reasons why DGX doesn’t excite us, plus one stock we’d rather own.
1. Long-Term Revenue Growth Disappoints
A company’s long-term sales performance is one signal of its overall quality. Any business can have short-term success, but a top-tier one grows for years. Unfortunately, Quest’s 1.8% annualized revenue growth over the last five years was tepid. This fell short of our benchmarks.
2. Shrinking Adjusted Operating Margin
Adjusted operating margin is an important measure of profitability as it shows the portion of revenue left after accounting for all core expenses — everything from the cost of goods sold to advertising and wages. It’s also useful for comparing profitability across companies because it excludes non-recurring expenses, interest on debt, and taxes.
Looking at the trend in its profitability, Quest’s adjusted operating margin decreased by 6.6 percentage points over the last five years. This raises questions about the company’s expense base because its revenue growth should have given it leverage on its fixed costs, resulting in better economies of scale and profitability. Its adjusted operating margin for the trailing 12 months was 16%.
3. EPS Trending Down
Analyzing the long-term change in earnings per share (EPS) shows whether a company’s incremental sales were profitable — for example, revenue could be inflated through excessive spending on advertising and promotions.
Sadly for Quest, its EPS declined by 6.2% annually over the last five years while its revenue grew by 1.8%. This tells us the company became less profitable on a per-share basis as it expanded.
Final Judgment
Quest isn’t a terrible business, but it doesn’t pass our quality test. With its shares lagging the market recently, the stock trades at 17.6× forward P/E (or $194.06 per share). While this valuation is reasonable, we don’t really see a big opportunity at the moment. We’re fairly confident there are better stocks to buy right now. We’d suggest looking at the Amazon and PayPal of Latin America.
Stocks We Like More Than Quest
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