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Quest Diagnostics' (DGX) COVID-19 Testing Demand Up in 3 Weeks

Quest Diagnostic DGX issued a periodical media statement on its COVID-19 testing-related business performance earlier this week. Following a robust third-quarter testing performance on rising COVID-19 case count, the company noted a further increase in testing demand through the past three weeks as the United States sees a surge in the Delta variant-led cases.

Let us delve deeper.

COVID-19 Testing Demand Surges in 3 Weeks

Over the past three weeks, Quest Diagnostics registered a steady uptick in the average positivity rate of COVID-19 diagnostic testing.

As per the real-time data, as of Nov 23, on a cumulative basis, the company performed and reported a total of 54.7 million molecular diagnostic tests since these services were initiated. The test capacity per day remained at 300,000.

For the same period, antibody (serology) tests performed and reported were 7.5 million on a cumulative basis. For this test, the test capacity per day was 350,000.

The majority of these testing turnaround times remained at one day.

Over the past three weeks, two million tests were performed.

According to the company, as the nation is entering the holiday season, testing service is gaining importance with regard to minimizing the risk of community exposure of COVID-19.

Latest Updates on COVID-19 Testing

Quest Diagnostics reported approximately 7.6 million molecular tests and nearly 700,000 serology tests in the last-reported third quarter of 2021. The company performed an average of 83,000 COVID-19 molecular tests in the quarter and maintained strong average turnaround times of approximately one day for most specimens throughout the surge. Going by the above real-time data, this trend is expected to gather momentum through the months of the fourth quarter (October-December), in line with the broader COVID-19 testing trends across the country.


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Meanwhile, in October, the company’s average COVID-19 molecular volumes declined 10% from the third quarter but were still above the levels expected prior to the surge in cases. Quest Diagnostics noted that while clinical COVID-19 volumes are currently declining, the company is expanding its non-clinical COVID-19 testing offerings to support the return to school, office, travel, and entertainment.

For instance, the company is currently performing K-12 school testing in approximately 20 states with five additional states ready to come online. Quest Diagnostics has raised it outlook for the remainder of 2021 partly based on higher-than-anticipated COVID-19 volumes.

Among the latest developments, the company recently has become the trusted lab partner for COVID-19 testing services by the state of Hawaii for its Trusted Testing and Travel Partners Program. Under this plan, individuals who must fulfill pre-travel testing requirements can purchase a COVID-19 Active Infection test and schedule an online appointment through the company’s QuestDirect consumer-initiated testing service.

The state requires pre-travel testing to be performed through its approved list of trusted partners. This is expected to generate further demand for Quest Diagnostics’ COVID-19 testing services.

Share Price Performance

Shares of the company have gained 19.8% in a year’s time against the industry’s 40.5% slump.

Zacks Rank and Key Picks

Quest Diagnostics currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the broader medical space include Thermo Fisher Scientific Inc. TMO, McKesson Corporation MCK and AngioDynamics, Inc. ANGO.

Thermo Fisher surpassed earnings estimates in each of the trailing four quarters, the average surprise being 9.02%. TMO currently carries a Zacks Rank of 2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Thermo Fisher’s long-term earnings growth rate is estimated at 14%. TMO’s earnings yield of 3.7% compares favorably with the industry’s (3.6%).

McKesson beat earnings estimates in the trailing four quarters, the average surprise being 19.9%. MCK currently carries a Zacks Rank #2.

McKesson’s long-term earnings growth rate is estimated at 8.9%. McKesson’s earnings yield of 9.9% compares favorably with the industry’s 3.2%.

AngioDynamics surpassed earnings estimates in three of the trailing four quarters and missed once, the average surprise being 125.6%. ANGO currently carries a Zacks Rank #2.

The Zacks Consensus Estimate for AngioDynamics’ fiscal 2022 revenues stands at $313.3 million, suggesting an improvement of 7.7% from the prior-year reported figure. AngioDynamics’ earnings yield of 0.1% compares favorably with the industry’s (3.6%).

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