Why the Haystack MRD approval matters for Quest Diagnostics stock

Quest Diagnostics (DGX) just received New York State approval for its Haystack MRD liquid biopsy test, clearing clinical use across all 50 states and expanding the company’s reach in advanced cancer diagnostics.

Alongside the Haystack MRD approval and Attunio Health partnership, Quest Diagnostics shares have climbed, with a year to date share price return of 24.13% and a 5 year total shareholder return of 75.34%, suggesting momentum has been building rather than fading.

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With Quest Diagnostics trading close to its analyst price target and carrying a solid value score, the key question now is whether Haystack MRD and new partnerships leave further upside on the table, or if the market is already pricing in future growth.

Most Popular Narrative: 3.5% Undervalued

With Quest Diagnostics last closing at $215.72 versus a narrative fair value of $223.44, the current setup frames the stock as modestly undervalued and puts extra focus on what is driving that gap.

Increased adoption of automation, digitization, and artificial intelligence in laboratory operations is yielding productivity improvements and cost savings, contributing to margin expansion and enhancing future operating income and net earnings. Strategic execution on accretive acquisitions including the large LifeLabs deal and expanded health system partnerships (e.g., with Fresenius) are boosting patient volumes, expanding geographic reach, and producing procurement and operational synergies that are expected to materially lift revenue and earnings.

Want to see what sits behind that earnings and margin story? The narrative leans on measured revenue growth, rising profitability, and a future earnings multiple that still assumes discipline.

Result: Fair Value of $223.44 (UNDERVALUED)

However, you still need to factor in risks, as possible cuts to Medicare reimbursement and rising wage and technology costs are both capable of pressuring the Quest Diagnostics story.

Next Steps

Balancing these rewards and risks around Quest Diagnostics, do you want to rely on others' sentiment or ground your view in the data yourself? Take a closer look at the full breakdown of 4 key rewards and 1 important warning sign

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.