LH

Healthcare

Labcorp

Price Chart

Market Data

Financials

XBRL · SEC EDGAR

2007–2025(19yr)

Revenue

Net Income

Free CF

Metric	FY 2007	FY 2008	FY 2009	FY 2010	FY 2011	FY 2012	FY 2013	FY 2014	FY 2015	FY 2016	FY 2017	FY 2018	FY 2019	FY 2020	FY 2021	FY 2022	FY 2023	FY 2024	FY 2025Latest	YoY
Revenue	$4.1B	$4.5B	$4.7B	$5.0B	$5.5B	$5.7B	$5.8B	$6.0B	$8.7B	$9.6B	$10.4B	$11.3B	$11.6B	$14.0B	$16.1B	$14.9B	$12.2B	$13.0B	$14.0B	+7.2%
Gross Profit	$1.7B	$1.9B	$2.0B	$2.1B	$2.3B	$2.2B	$2.2B	$2.2B	$2.9B	$3.2B	$3.5B	$3.2B	$3.3B	$5.0B	$5.6B	$4.4B	$3.4B	$3.6B	$4.0B	+10.7%
Gross Margin	41.6%	41.6%	42.0%	41.9%	41.0%	39.7%	38.3%	36.6%	33.4%	33.0%	33.2%	28.0%	28.1%	35.4%	34.9%	29.5%	27.7%	27.9%	28.8%	+0.9pp
Operating Income	$777.0M	$842.9M	$935.9M	$978.8M	$948.4M	$1.0B	$990.9M	$910.4M	$1.0B	$1.3B	$1.4B	$1.3B	$1.3B	$2.4B	$3.3B	$1.8B	$725.6M	$1.1B	$1.4B	+27.4%
Operating Margin	19.1%	18.7%	19.9%	19.6%	17.1%	18.0%	17.1%	15.1%	11.6%	13.6%	13.1%	11.7%	11.5%	17.5%	20.2%	11.9%	6.0%	8.4%	9.9%	+1.6pp
Net Income	$476.8M	$464.5M	$543.3M	$558.2M	$519.7M	$583.1M	$573.8M	$511.2M	$436.9M	$732.1M	$1.3B	$883.7M	$823.8M	$1.6B	$2.4B	$1.3B	$418.0M	$746.0M	$876.5M	+17.5%
Net Margin	11.7%	10.3%	11.6%	11.2%	9.4%	10.3%	9.9%	8.5%	5.0%	7.6%	12.1%	7.8%	7.1%	11.1%	14.7%	8.6%	3.4%	5.7%	6.3%	+0.5pp
Free Cash Flow	$567.1M	$624.2M	$747.7M	$757.5M	$709.9M	$667.6M	$616.5M	$535.5M	$726.6M	$897.0M	$1.1B	$925.6M	$1.0B	$1.8B	$2.6B	$1.5B	$874.1M	$1.1B	$1.2B	+10.0%
FCF Margin	13.9%	13.9%	15.9%	15.1%	12.8%	11.8%	10.6%	8.9%	8.4%	9.3%	11.0%	8.2%	9.0%	12.5%	16.4%	9.9%	7.2%	8.4%	8.6%	+0.2pp
EPS (Diluted)	$3.93	$4.16	$4.98	$5.29	$5.11	$5.99	$6.25	$5.91	$4.34	$7.02	$12.21	$8.61	$8.35	$15.88	$24.39	$13.97	$4.77	$8.84	$10.46	+18.3%

Total Debt$5.1B

Cash & Equiv.$532.3M

Net Debt$4.6B

3 min read

1. THE BIG PICTURE

Labcorp is a scale play in a low-margin, highly regulated industry, attempting to pivot from a commodity testing provider to an integrated data and drug-development partner. While its physical reach—placing a lab within 10 miles of most Americans—creates a formidable defensive moat, Labcorp is currently trapped between rising legal liabilities and structural margin pressure that leaves it trailing every major peer in profitability.

2. WHERE THE RISKS HIT HARDEST

Labcorp’s "integrated capabilities" and specialty testing leadership are directly threatened by the $374.6 million Ravgen patent judgment, which imposes a $100-per-test royalty that could erode the profitability of its high-growth diagnostics (10-K Item 1A). Furthermore, the strategic focus on "Scale and Reach" is complicated by $5.2 billion in senior notes; with $500 million maturing within a year, Labcorp’s ability to fund the 13 acquisitions it signed or closed in 2025 is constrained by its 5.1x net leverage (8-K, XBRL). Finally, the push into digital tools like Labcorp Patient™ increases exposure to cybersecurity risks, where past breaches have already resulted in significant litigation and operating costs (10-K Item 1A).

3. WHAT THE NUMBERS SAY TOGETHER

The data reveals a company growing faster than its largest peers but struggling to convert that growth into bottom-line returns. Labcorp’s 7.2% revenue growth (XBRL) outperforms Thermo Fisher (+3.9%) and Danaher (+2.9%), yet its 6.4% net margin is the lowest in the peer group. This disconnect is partly driven by a mix shift within the Biopharma segment: while Central Labs grew 11.1% in Q4 2025, Early Development revenue plunged 13.5%, suggesting a structural slowdown in early-stage research that offsets gains in clinical trials (8-K). Short interest at 4.8% of the float indicates a degree of skepticism regarding this margin recovery, especially as Labcorp faces a 15% annual cap on Medicare rate reductions starting in 2027 (10-K Item 1A).

4. IS IT WORTH IT AT THIS PRICE?

At 14.0x Forward P/EP/EPrice-to-Earnings ratio — share price divided by annual earnings per share; how much investors pay per dollar of profit. Higher P/E = higher growth expectations, the market is pricing in ~2.7% long-term growth (CAPM analysis). This is a modest discount to the 17.5x peer median, which is justified by Labcorp’s position as the least efficient operator in the group; its 28.6% gross margin sits nearly 13 percentage points below Thermo Fisher (XBRL). While the 2.7% implied growth rate is conservative compared to Labcorp’s 2026 guidance for 8.9% adjusted EPSEPSEarnings Per Share — the company's net profit divided by its share count; the most common per-share profitability metric growth, the valuation reflects the higher-leverage profile (5.1x net leverage) and the unique $374.6 million legal overhang not shared by Quest or IQVIA. If growth were to slow to 2.5%, the justified multiple would fall further to 13.6x.

5. WHAT WOULD CHANGE THIS VIEW?

Constructive if the BLS Early Development sub-segment returns to growth, reversing the recent 13.5% decline and signaling a broader recovery in biotech R&DR&DResearch & Development — spending on creating new products or technologies spending.
Cautious if credit ratings are downgraded, as the $5.2 billion debt load makes Labcorp highly sensitive to increased borrowing costs (10-K Item 1A).
Cautious if the Ravgen royalty obligations expand to a larger portion of the test menu, further compressing the already peer-trailing 10% operating margin.

6. BOTTOM LINE

Structural Advantage: A massive domestic logistics network and 90,000 electronic interfaces that create high switching costs for health systems and providers. Bottom Line: Labcorp is a high-growth, low-margin scale play that remains a risky bet until it clears its legal hurdles and stabilizes its debt-heavy balance sheet.

Source: Synthesis · LLM Analysis

4 min read

1. Top 5 Material Risks

Reimbursement and Payer Mix: Labcorp’s revenue and cash flow are sensitive to shifts toward government and managed care organization (MCO) payers, which often carry lower reimbursement rates. While Medicare rate reductions under PAMA are frozen for 2026, they remain capped at 15% annually for 2027–2029, creating ongoing pressure on margins.
Indebtedness: Labcorp carries $5.2 billion in senior notes as of December 31, 2025, with $500 million maturing within 12 months. High leverage limits Labcorp’s ability to pursue strategic acquisitions and increases vulnerability to interest rate volatility and potential credit rating downgrades.
Intellectual Property Litigation: Labcorp is currently defending a patent infringement lawsuit brought by Ravgen Inc. Labcorp faces a $272 million jury verdict, $100 million in enhanced damages, and $2.6 million in supplemental damages, plus an ongoing royalty of $100 per test for the life of the patent.
Cybersecurity and Data Privacy: Labcorp processes sensitive personal and financial information, making it a target for ransomware and data breaches. Past incidents, such as the AMCA Incident, resulted in significant costs, regulatory inquiries, and litigation, threatening both operating expenses and reputation.
Acquisition Integration: Labcorp has deployed approximately $3.8 billion in net cash for strategic acquisitions since January 1, 2021. Failure to successfully integrate these businesses or realize expected benefits could lead to goodwill impairment and the diversion of management resources.

2. Company-Specific Risks

Research Animal Supply: Labcorp’s drug development segment (BLS) relies on healthy research animal populations. Disease outbreaks or regulatory restrictions on the import of these animals can disrupt operations, increase costs, and damage Labcorp’s reputation.
Spin-off Tax Restrictions: To maintain the tax-free status of the Fortrea spin-off, Labcorp is restricted in its ability to pursue certain capital-raising or strategic transactions, particularly those involving a 50% or greater change in ownership, for a two-year period.
Animal Rights Activism: Labcorp faces potential operational disruptions and reputational harm from vandalism or other actions by activists objecting to the use of animals in preclinical drug development.
Fixed-Price Contract Risk: BLS enters into fixed-price and capped fee-for-service contracts, bearing the financial risk if actual costs exceed initial estimates or if projects are delayed or terminated by customers.

3. Regulatory/Legal Risks

FDA Regulation of LDTs: The FDA’s final rule to regulate Laboratory Developed Tests (LDTs) as medical devices could increase regulatory burdens and compliance costs, potentially impacting the commercialization of new diagnostic tests.
Anti-Kickback and Fraud Laws: Labcorp is subject to laws such as the Eliminating Kickbacks in Recovery Act. Noncompliance could result in civil or criminal penalties, exclusion from Medicare and Medicaid, and restrictions on laboratory operations.
CLIA Compliance: Failure to maintain certification under the Clinical Laboratory Improvement Amendments (CLIA) could result in the suspension or revocation of a laboratory’s ability to bill government and private payers.
International Data Protection: Labcorp must comply with the EU GDPR, U.K. GDPR, and other regional data laws. Noncompliance carries the risk of significant fines and orders to cease specific business activities.

4. Financial Impact Map

Reimbursement and Payer Mix → Revenues and Profitability → Lower reimbursement rates from government and MCO payers. Indebtedness → Liquidity and Results of Operations → $5.2 billion in senior notes requires debt service and limits financing flexibility. Intellectual Property Litigation → Net Earnings and Cash Flows → $374.6 million in total damages awarded to date plus ongoing $100-per-test royalty. Cybersecurity Incidents → Operating Expenses → Costs associated with data breaches, litigation, and regulatory inquiries. Acquisition Integration → Goodwill and Intangible Assets → Potential for periodic impairment charges if integration fails to meet expectations.

Source: 10-K Item 1A · LLM Analysis

Recent Filings

Form	Filed	Period
10-K	Feb 2026	Dec 2025
8-K	Feb 2026	—
10-Q	Oct 2025	Sep 2025
14A	Apr 2025	—