Value
6.1/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 4.9 |
| P/S | 9.2 |
| EV/EBITDA | 4.0 |
| Fwd P/E | 8.1 |
| PEG | 6.2 |
| Analyst target | 4.0 |
- ▸Forward P/E: 14.8x
- ▸PEG: 1.20
LH · Why this verdict
Why Labcorp Holdings (LH) is rated HOLD
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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VerdictHOLD
Overall score5.6/10
ConfidenceMEDIUM
MacroNEUTRAL
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
Labcorp has beaten EPS estimates in each of the last four quarters with narrow but consistent surprises averaging roughly 3%, indicating management consistently sets achievable targets and delivers above them. Earnings | The beat streak extends to six consecutive quarters with no negative surprise, confirming the cadence is structural rather than a run of favorable comparisons. | →Stable |
| CounterThe beats are thin — ranging from 1.0% to 4.5% — and even a single in-line or slight miss could break the streak and depress sentiment given elevated consistency expectations. | ||
The stock has triggered a death cross — a configuration where the short-term average crosses below the long-term average — alongside on-balance volume in distribution mode, producing a hard technical block that prevents a qualified entry under a disciplined framework. Engine gate (failed) | The stock reclaims and sustains above its 200-day moving average for 20 consecutive trading sessions, resolving the death cross and restoring technical clearance. | →Stable |
| CounterMACD is improving and RSI stands at 59 — above the midpoint — suggesting the stock may already be in the early stages of a recovery; the death cross formation is recent and shallow enough that a reversal could be imminent. | ||
With the diagnostics segment representing 78% of total revenue and North America accounting for 87% of total revenue, the business has very limited offsets if reimbursement rates, regulatory conditions, or demand trends shift adversely in either dimension. Bear case | Revenue from segments outside diagnostics exceeds 25% of total for 2 consecutive quarters, indicating meaningful portfolio diversification is underway. | →Stable |
| CounterDominant positioning in a single large and essential service line can generate superior unit economics compared with a spread-too-thin approach; the concentration may reflect competitive advantage rather than vulnerability. | ||
Free cash flow runs at 121% of net income — above the reported earnings line — and a financial-health score of 7 out of 9 confirms solid near-term balance-sheet discipline, though the absence of an identified competitive moat raises questions about how durable those cash flows are over a full cycle. Quality breakdown | Operating margin expands by at least 2 percentage points year-over-year for two consecutive quarters, suggesting the underlying business has pricing power or efficiency levers that can sustain cash generation. | →Stable |
| CounterStrong cash conversion and a near-full financial-health score suggest the business is generating cash efficiently today; the lack of a named moat may reflect an analytical classification gap rather than a genuine structural weakness. | ||
Labcorp has beaten EPS estimates in each of the last four quarters with narrow but consistent surprises averaging roughly 3%, indicating management consistently sets achievable targets and delivers above them.
→StableEarnings
- Expectation
- The beat streak extends to six consecutive quarters with no negative surprise, confirming the cadence is structural rather than a run of favorable comparisons.
CounterThe beats are thin — ranging from 1.0% to 4.5% — and even a single in-line or slight miss could break the streak and depress sentiment given elevated consistency expectations.
The stock has triggered a death cross — a configuration where the short-term average crosses below the long-term average — alongside on-balance volume in distribution mode, producing a hard technical block that prevents a qualified entry under a disciplined framework.
→StableEngine gate (failed)
- Expectation
- The stock reclaims and sustains above its 200-day moving average for 20 consecutive trading sessions, resolving the death cross and restoring technical clearance.
CounterMACD is improving and RSI stands at 59 — above the midpoint — suggesting the stock may already be in the early stages of a recovery; the death cross formation is recent and shallow enough that a reversal could be imminent.
With the diagnostics segment representing 78% of total revenue and North America accounting for 87% of total revenue, the business has very limited offsets if reimbursement rates, regulatory conditions, or demand trends shift adversely in either dimension.
→StableBear case
- Expectation
- Revenue from segments outside diagnostics exceeds 25% of total for 2 consecutive quarters, indicating meaningful portfolio diversification is underway.
CounterDominant positioning in a single large and essential service line can generate superior unit economics compared with a spread-too-thin approach; the concentration may reflect competitive advantage rather than vulnerability.
Free cash flow runs at 121% of net income — above the reported earnings line — and a financial-health score of 7 out of 9 confirms solid near-term balance-sheet discipline, though the absence of an identified competitive moat raises questions about how durable those cash flows are over a full cycle.
→StableQuality breakdown
- Expectation
- Operating margin expands by at least 2 percentage points year-over-year for two consecutive quarters, suggesting the underlying business has pricing power or efficiency levers that can sustain cash generation.
CounterStrong cash conversion and a near-full financial-health score suggest the business is generating cash efficiently today; the lack of a named moat may reflect an analytical classification gap rather than a genuine structural weakness.
TrendMatrix Research · core thesis
Engine thesis — one sentence
Labcorp has maintained a clean four-quarter earnings beat streak and converts free cash flow well above net income, but the stock has triggered a hard technical block — trading below its long-term moving average — while facing heavy revenue concentration in one business segment and one geography, and an insufficient reward-to-risk ratio that supports only a hold-and-watch posture.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Per-dimension breakdown
Quality
4.9/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 3.7 |
| ROA | 3.5 |
| Gross margin | 1.8 |
| Op margin | 4.4 |
| Net margin | 3.3 |
| Current ratio | 6.2 |
| FCF quality | 9.0 |
| Moat | 4.2 |
| Piotroski F | 7.8 |
- ▸Excellent cash conversion: 121% FCF/NI
- ▸No competitive moat
- ▸Strong Piotroski F-Score: 7/9
Growth
6.2/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 3.9 |
| EPS growth | 8.6 |
Momentum
7.1/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 4.3 |
| MACD | 10.0 |
| OBV | 10.0 |
| MA position | 8.0 |
| Volume | 3.1 |
- ▸Overbought (RSI 74)
- ▸Volume accumulation (rising OBV)
- ▸Above 200-MA but MA slope flat
Sentiment
6.3/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 7.4 |
| Price target | 6.2 |
| erm sentiment | 5.0 |
Insider
5.0/10data confidence 50%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 5.1 |
- ▸Insider selling (low materiality) — $1,703,398 (0.007% of mkt cap)
Peer rank
4.4/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 8.6 |
| quality rank | 5.7 |
| growth rank | 3.1 |
- ▸Attractive P/E vs peers
Technical
3.3/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 0.0 |
| support resistance | 0.2 |
| 52w position | 9.7 |
Risk (lower is worse)
6.3/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 8.0 |
| days to cover | 4.7 |
| volatility | 6.9 |
| put call | 5.9 |
| implied vol | 5.0 |
| beta | 7.8 |
| debt equity | 6.0 |
- ▸Concentration risks: 2 HIGH, 1 MED (10-K Item 1A — sized via position_sizing, validated via buy_confidence)
Catalyst
6.0/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 10.0 |
| earnings timing | 5.0 |
| surprise avg | 4.0 |
| dividend safety | 6.0 |
- ▸Perfect beat streak: 4Q
- ▸Dividend: 100.0%
How the verdict was assembled
Engine trigger
Mixed signals. Hold existing position.
Engine technical detail
verdict_path:
L4:PATH_F_HOLD_DEFAULTPassed (7)
- MOMENTUM:7.1>=5.5
- INSIDER:OK
- 8K:CLEAN
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:27d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- ASYMMETRY:-0.2=NEGATIVE
Warning (1)
- DEATH_CROSS:momentum=7.1>=5.0 recovering
Reward-to-Risk
-0.23
Upside
-2.7%
Downside
11.8%
Sizing output
AVOID
SetupRecovery — Death cross but MACD improving, RSI 74
EdgeCatalyst-Driven — Earnings in 27d with 4/4 beat streak
SuitabilityModerate — Balanced profile
Investment implication
The default F-path HOLD fired without any positive-conviction gate triggering — no momentum acceleration, no quality+value crossover, no setup recognition. Highest-clear gate: MOMENTUM:7.1>=5.5. Top dim: Momentum at 7.1; weakest: Technical at 3.3. The engine's read is one of pattern absence — no directional conviction in either direction at current asymmetry.
The strongest dimensions are Momentum at 7.1, Sentiment at 6.3, and Risk (lower is worse) at 6.3; the weakest are Technical at 3.3, Peer rank at 4.4, and Quality at 4.9. The V9 engine flagged 1 failed gate with 1 warning, producing an asymmetric reward-to-risk of -0.23 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Clean Four Quarter Beat Streak
Trip ifEPS surprise falls below 0% in any of the next 2 reported quarters.
- P2Death Cross Technical Hard Block
Trip ifStock price closes above its 200-day moving average and sustains that level for 20 consecutive trading sessions.
- P3High Revenue Concentration Risk
Trip ifRevenue from non-diagnostics segments exceeds 25% of total revenue for 2 consecutive quarters.
- P4Solid Cash Conversion Without Moat
Trip ifFree cash flow falls below 80% of net income for 2 consecutive quarters.