Labcorp (LH, $256.21) beats Q4 earnings estimates; top-line decreases on COVID-19 testing revenue dip
Laboratory Corporation of America Holdings posted fourth-quarter 2022 adjusted earnings per share of $4.14, topping analysts' estimates of $4.10. The figure was also down -38.8% from the year-ago quarter’s figure.
Revenues were down -9.4% year-over-year to $3.67 billion, missing the Street estimates of $3.74 billion (according to Refinitiv data).
Organic revenues fell -9.4%, amid a -13.4% decrease in COVID-19 PCR and antibody testing (COVID-19 testing), partially offset by a +3.9% rise in organic Base Business. Foreign currency impact had a -1.3% adverse impact. However, there was a +1.3% growth from acquisitions net of divestitures.
Gross margin contracted -750 basis points to 26.4% in the fourth quarter. Adjusted operating margin narrowed by -870 bps from the year-ago quarter to 11.8%.
Laboratory Corporation expects full-year adjusted earnings per share in the range of $16 to $18 per share, while the Street forecast is $17.65. The company projects 2023 free cash flow figure in the range of $1-$1.2 billion.
Total LabCorp Enterprise revenues (net of intersegment transaction eliminations, including Drug Development COVID-19 testing revenues) are expected to have growth in the range of 1-4%. Base Business growth is predicted to be 8.5-10.5%. The company anticipates COVID-19 testing revenues to decrease by -75% to -90%. Total Diagnostics revenues are projected to be down -2% to up +1.5%. Total Drug Development revenues are expected to grow 5-7%.
Contributor
Sergey Savastiouk, Ph.D. has a degree in Applied Mathematics from Moscow University and has extensive experience as an entrepreneur, investor, manager, and mathematician. His professional expertise is in applied mathematics, mathematical modeling, system and pattern analysis, and software and hardware system integration. He has served as the CEO of several hi-tech start-up companies and nonprofit organizations, which has given him proven capabilities in business strategy for high-tech start-up companies, market assessment, company formation, team building, product development, marketing, and sales. He has published numerous articles in journals and magazines on related fields. As a retail investor, he spent 15 years developing his proprietary trading and quantitative algorithms (now Tickeron’s A.I.), which brought him significant returns in trading the stock market. His current work and goal in founding Tickeron is to bring professional, sophisticated stock market analysis capabilities to retail investors via an easy-to-use interface.
Aroon Indicator for LH shows an upward move is likely
LH's Aroon Indicator triggered a bullish signal on August 27, 2026. Tickeron's A.I.dvisor detected that the AroonUp green line is above 70 while the AroonDown red line is below 30. When the up indicator moves above 70 and the down indicator remains below 30, it is a sign that the stock could be setting up for a bullish move. Traders may want to buy the stock or look to buy calls options. A.I.dvisor looked at 189 similar instances where the Aroon Indicator showed a similar pattern. In of the 189 cases, the stock moved higher in the days that followed. This puts the odds of a move higher at .
Technical Analysis (Indicators)
Bullish Trend Analysis
Following a 3-day Advance, the price is estimated to grow further. Considering data from situations where LH advanced for three days, in of 326 cases, the price rose further within the following month. The odds of a continued upward trend are .
Bearish Trend Analysis
The RSI Indicator demonstrates that the ticker has stayed in the overbought zone for 6 days. The longer the ticker stays in the overbought zone, the sooner a price pull-back is expected.
The Stochastic Oscillator demonstrated that the ticker has stayed in the overbought zone for 22 days. The longer the ticker stays in the overbought zone, the sooner a price pull-back is expected.
The Moving Average Convergence Divergence Histogram (MACD) for LH turned negative on August 27, 2026. This could be a sign that the stock is set to turn lower in the coming weeks. Traders may want to sell the stock or buy put options. Tickeron's A.I.dvisor looked at 52 similar instances when the indicator turned negative. In of the 52 cases the stock turned lower in the days that followed. This puts the odds of success at .
Following a 3-day decline, the stock is projected to fall further. Considering past instances where LH declined for three days, the price rose further in of 62 cases within the following month. The odds of a continued downward trend are .
LH broke above its upper Bollinger Band on August 21, 2026. This could be a sign that the stock is set to drop as the stock moves back below the upper band and toward the middle band. You may want to consider selling the stock or exploring put options.
Fundamental Analysis (Ratings)
The Tickeron Valuation Rating of (best 1 - 100 worst) indicates that the company is seriously undervalued in the industry. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. This rating is based on the following metrics, as compared to industry averages: P/B Ratio (3.158) is normal, around the industry mean (58.317). P/E Ratio (27.718) is within average values for comparable stocks, (151.700). Projected Growth (PEG Ratio) (1.400) is also within normal values, averaging (1.740). Dividend Yield (0.009) settles around the average of (0.007) among similar stocks. P/S Ratio (1.937) is also within normal values, averaging (10.514).
The Tickeron Price Growth Rating for this company is (best 1 - 100 worst), indicating outstanding price growth. LH’s price grows at a higher rate over the last 12 months as compared to S&P 500 index constituents.
The Tickeron Profit vs. Risk Rating rating for this company is (best 1 - 100 worst), indicating well-balanced risk and returns. The average Profit vs. Risk Rating rating for the industry is 90, placing this stock slightly better than average.
The Tickeron PE Growth Rating for this company is (best 1 - 100 worst), pointing to consistent earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents.
The Tickeron SMR rating for this company is (best 1 - 100 worst), indicating slightly better than average sales and a considerably profitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.
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General Information
a provider of medical testing services
Industry MedicalSpecialties
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