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Quest Diagnostics, Inc. – Medical Laboratories
quest diagnostics (nyse: dgx) empowers people to take action to improve health outcomes. derived from the world's largest database of clinical lab results, our diagnostic insights reveal new avenues to identify and treat disease, inspire healthy behaviors and improve health care management. quest annually serves one in three adult americans and half the physicians and hospitals in the united states, and our 45,000 employees understand that, in the right hands and with the right context, our diagnostic insights can inspire actions that transform lives. the company offers physicians the broadest test menu (3,000+ tests), is a pioneer in developing innovative new tests, is the leader in cancer diagnostics, provides anatomic pathology (ap) services, & interpretive consultation through its medical & scientific staff of about 900 m.d.s & ph.d.s. the company reported 2014 revenues of $7.4 billion. quest diagnostics offers the most extensive clinical testing network in the u.s., with laborator
Analysis Results
Intrinsic Value $368.60
Latest Price $123.48
Relative Value 66% undervalued
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Cash Flow (Billions)
Analysis Parameters
New Ticker
Analysis Details
Growth Rate Projection

An exponential growth model was fit to the past cash flow data, giving more weight to more recent years. This model determined a growth rate estimate of 6.9%.

Weighted Average Cost of Capital (WACC)

The calculated WACC is 5.8%. This value is used as the default discount rate.

Value of Future Flows

Assuming a growth rate of 6.9%, the cash flows for the next 5 years are projected.

The present value of each year's flow is adjusted to present value using the discount rate.

Year Future flow (billion) Present value (billion)
2023 1.37 1.3
2024 1.47 1.31
2025 1.57 1.33
2026 1.68 1.34
2027 1.79 1.36
Terminal Value

Assuming a growth rate after the projection years of 2.0%, the terminal value of the company would be 48.6 billion. This corresponds to a present value of 34.7 billion.

Intrinsic Value Per Share

The total present value of the projected cash flows is 6.63 billion. Adding in the terminal value gives a total present value of 41.4 billion.

There are presently 112.0 million outstanding shares, so the intrinsic value per share is 368.6.

Financial Statements

The following data was to determine the past cash flows.

Current Assets 1,898,000,000
Current Cash 315,000,000
Current Liabilities 1,551,000,000
Current Debt 94,000,000
Non-Cash Working Capital (NCWC) 126,000,000
Change in NCWC -108,000,000
EBIT 1,483,000,000
Tax Provision 264,000,000
Depreciation and Amortization 437,000,000
Capital Expenditure -404,000,000
Unlevered Free Cash Flow 1,101,892,103
Current Assets 2,741,000,000
Current Cash 872,000,000
Current Liabilities 1,753,000,000
Current Debt 118,000,000
Non-Cash Working Capital (NCWC) 234,000,000
Change in NCWC -45,000,000
EBIT 2,459,000,000
Tax Provision 597,000,000
Depreciation and Amortization 408,000,000
Capital Expenditure -403,000,000
Unlevered Free Cash Flow 1,870,616,361
Current Assets 3,058,000,000
Current Cash 1,158,000,000
Current Liabilities 1,776,000,000
Current Debt 155,000,000
Non-Cash Working Capital (NCWC) 279,000,000
Change in NCWC 79,000,000
EBIT 2,055,000,000
Tax Provision 460,000,000
Depreciation and Amortization 361,000,000
Capital Expenditure -418,000,000
Unlevered Free Cash Flow 1,594,457,886
Current Assets 2,490,000,000
Current Cash 1,192,000,000
Current Liabilities 1,990,000,000
Current Debt 892,000,000
Non-Cash Working Capital (NCWC) 200,000,000
Change in NCWC -132,000,000
EBIT 1,288,000,000
Tax Provision 247,000,000
Depreciation and Amortization 329,000,000
Capital Expenditure -400,000,000
Unlevered Free Cash Flow 804,209,179
Current Assets 1,390,000,000
Current Cash 135,000,000
Current Liabilities 1,485,000,000
Current Debt 562,000,000
Non-Cash Working Capital (NCWC) 332,000,000
Change in NCWC 113,000,000
EBIT 1,149,000,000
Tax Provision 182,000,000
Depreciation and Amortization 309,000,000
Capital Expenditure -383,000,000
Unlevered Free Cash Flow 972,414,432
Current Assets 1,306,000,000
Current Cash 137,000,000
Current Liabilities 1,057,000,000
Current Debt 107,000,000
Non-Cash Working Capital (NCWC) 219,000,000
Change in NCWC 22,000,000
EBIT 1,200,000,000
Tax Provision 241,000,000
Depreciation and Amortization 270,000,000
Capital Expenditure -252,000,000
Unlevered Free Cash Flow 968,450,704
Current Assets 1,531,000,000
Current Cash 359,000,000
Current Liabilities 981,000,000
Current Debt 6,000,000
Non-Cash Working Capital (NCWC) 197,000,000
Change in NCWC -157,000,000
EBIT 1,198,000,000
Tax Provision 429,000,000
Depreciation and Amortization 249,000,000
Capital Expenditure -293,000,000
Unlevered Free Cash Flow 540,162,666
Current Assets 1,501,000,000
Current Cash 133,000,000
Current Liabilities 1,173,000,000
Current Debt 159,000,000
Non-Cash Working Capital (NCWC) 354,000,000
Change in NCWC 134,000,000
EBIT 1,088,000,000
Tax Provision 373,000,000
Depreciation and Amortization 304,000,000
Capital Expenditure -263,000,000
Unlevered Free Cash Flow 902,587,921
Current Assets 1,603,000,000
Current Cash 192,000,000
Current Liabilities 1,709,000,000
Current Debt 518,000,000
Non-Cash Working Capital (NCWC) 220,000,000
Change in NCWC -56,000,000
EBIT 1,009,000,000
Tax Provision 262,000,000
Depreciation and Amortization 314,000,000
Capital Expenditure -308,000,000
Unlevered Free Cash Flow 647,624,263
Current Assets 1,383,000,000
Current Cash 187,000,000
Current Liabilities 1,132,000,000
Current Debt 212,000,000
Non-Cash Working Capital (NCWC) 276,000,000
Change in NCWC 48,788,000
EBIT 1,025,000,000
Tax Provision 500,000,000
Depreciation and Amortization 283,000,000
Capital Expenditure -231,000,000
Unlevered Free Cash Flow 745,595,121
Current Assets 1,560,997,000
Current Cash 295,586,000
Current Liabilities 1,047,603,000
Current Debt 9,404,000
Non-Cash Working Capital (NCWC) 227,212,000
Change in NCWC -102,398,000
EBIT 1,226,422,000
Tax Provision 401,897,000
Depreciation and Amortization 286,596,000
Capital Expenditure -182,234,000
Unlevered Free Cash Flow 767,044,153

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