Is This the Right Time to Hold Labcorp Stock in Your Portfolio?

Labcorp Holdings Inc. LH, or Labcorp, is well-poised for growth in the coming quarters due to its test expansion in strategic high-growth areas, including neurology and autoimmune disease. The company’s ongoing focus on enhancing its partnership with the hospitals and the health care systems has deepened its presence in important markets. LaunchPad synergies continue to strengthen its margin profile. Yet, adverse currency headwinds and macroeconomic pressures raise concerns for Labcorp’s operations.

In the past year, this Zacks Rank #3 (Hold) stock has risen 10.2% compared with the 6.4% growth of the industry and a 21.8% increase of the S&P 500 composite.

The renowned healthcare diagnostics company has a market capitalization of $23.61 billion. Labcorp’s earnings yield of 6.2% favorably compares with the industry’s 4.1% yield. In the trailing four quarters, the company delivered an average earnings surprise of 3.07%.

Let’s delve deeper.

Tailwinds for Labcorp

Targeted Development in High-Growth Areas: Labcorp continues to expand its business in specialty testing areas such as oncology, women’s health, autoimmune disease and neurology, which are expected to grow up to three times faster than other therapeutic areas. In oncology, the company now offers more than 450 tests spanning multiple cancer types and stages, reflecting comprehensive and advanced testing capabilities. The integration of Invitae has further expanded its genetic testing reach. Labcorp’s PGDx elio tissue complete also secured CE marking under the European Union's (“EU”) new In Vitro Diagnostic Regulation (“IVDR”), becoming the first test in the region cleared for comprehensive solid tumor profiling.

The company also expanded its neurology capabilities with two new Alzheimer's tests for specialty and primary care settings. It is also working as a commercial partner to expand access to Geneoscopy’s FDA-approved, simplified at-home collection method for the ColoSense colorectal cancer screening test.

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Strategic Acquisitions and Partnerships to Drive Growth: Labcorp has steadily built strategic relationships with health systems and regional/local laboratories over the years, expanding its patient and provider network, while strengthening its presence in key markets. In 2025, the company purchased select oncology and clinical testing assets from BioReference Health and acquired North Mississippi Health Services’ ambulatory outreach laboratory business while also becoming a referral laboratory for its seven hospitals and clinic laboratories.

In the fourth quarter alone, Labcorp invested $258 million in acquisitions, with closed deals contributing 1.2% to top-line growth. The company completed its acquisition of select outreach assets from Community Health Systems, acquired select anatomic pathology assets from Incyte Diagnostics and signed an agreement to acquire select outreach laboratory services from Parkview Health.

Focus on Operational Efficiency: In 2025, Labcorp achieved $100-$125 million in annual savings under its LaunchPad business process improvement initiative. AI-powered solutions, such as the Labcorp Test Finder, simplified appointment scheduling and results reporting for consumers. Test Finder is now integrated into Labcorp Diagnostic Assistant, a digital solution embedded within the electronic health record (EHR), and also available through EHR companion platform Labcorp Link.

Labcorp also launched eClaim Assist, a next-generation digital platform that streamlines patient claim information updates and responses, reducing time and enhancing efficiency. For full-year 2025, the company expanded the enterprise margin by more than 50 points, with key drivers being strong top-line growth, disciplined expense management and synergies of the LaunchPad initiative.

What Ails Labcorp?

Exposed to Currency Headwind: Labcorp's huge exposure in international markets makes it vulnerable to currency fluctuations. With the recent upward trend observed in the value of the U.S. dollar, further acceleration expected by analysts in this value will cause the company’s revenues to face a tough situation overseas.

Macroeconomic Risks: Labcorp relies heavily on the demand for diagnostic testing and drug development services from patients, physicians, hospitals, medical device companies and others. In recent times, volatilities in global economic conditions, including inflation, have significantly affected the demand for these services, impacting customers’ ability to pay and, consequently, the company’s profitability. The escalation of the present geopolitical tensions and retaliatory tariffs is putting pressure on the supply chain and services, increasing the prices of offerings.

LH Stock Estimate Trend

In the past 30 days, the Zacks Consensus Estimate for Labcorp’s 2026 earnings per share (EPS) has edged up 0.3% to $17.65.

The Zacks Consensus Estimate for 2026 revenues is pegged at $14.67 billion, implying 5.2% growth relative to the 2025 figure.

Top MedTech Stocks

Some better-ranked stocks in the broader medical space are Phibro Animal Health PAHC, Envista NVST and Align Technology ALGN.

Phibro Animal Health has an earnings yield of 5.5%, well ahead of the industry’s 2.5% yield. Its earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters, with the average surprise being 20.2%. The company’s shares have surged 117.5% against the industry’s 15.1% fall in the past year.

PAHC sports a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Envista, sporting a Zacks Rank #1, has an earnings yield of 4.8% compared with the industry’s 2.5%. Shares of the company have rallied 54% against the industry’s 15.1% fall. NVST’s earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 16.4%.

Align Technology, carrying a Zacks Rank #2 (Buy) at present, has an estimated long-term earnings growth rate of 10.1% compared with the industry’s 9.1% growth. Shares of the company have rallied 7.5% compared with the industry’s 22% growth. ALGN’s earnings beat estimates in three of the trailing four quarters and missed on one occasion, with the average surprise being 6.2%.

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Labcorp Holdings Inc. (LH): Free Stock Analysis Report

Align Technology, Inc. (ALGN): Free Stock Analysis Report

Phibro Animal Health Corporation (PAHC): Free Stock Analysis Report

Envista Holdings Corporation (NVST): Free Stock Analysis Report

This article originally published on Zacks Investment Research (zacks.com).

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