Labcorp Holdings Inc. (LH) stock analysis

P/E above its 5-year median

Labcorp's P/E of 30.4 is above its own 5-year median of 24.7.

P/E above the industry

Labcorp's P/E of 30.4 is above the Health Services median of 23.9.

EV/EBITDA above its 5-year median

Labcorp's EV/EBITDA of 16.2 is above its 5-year median of 13.9.

P/B above the industry

Labcorp's price-to-book of 3.40 is above the Health Services median of 3.40.

Trading above fair value

The share price of $370.88 is above our fair value estimate of $349.78.

Margin of safety under 20%

The price is 6.0% above fair value, so there is no margin of safety.

Revenue growing under 10% a year

Revenue grew 5.6% a year over the last three fiscal years, short of the 10% we look for.

EPS growing under 10% a year

Diluted EPS grew -9.2% a year over the last three fiscal years.

Earnings growth accelerating

Net income grew 17.4% over the last twelve months, against a 5-year average of -10.8% a year.

Growing slower than the industry

Revenue grew 6.0% over the last twelve months; the Health Services median is 16.9%.

Guidance lowered

Labcorp lowered its 2026 Biopharma Laboratory Services outlook on Jul 30, 2026.

Gross margin improving

Gross margin was 29.0% over the last twelve months, against 28.4% a year earlier.

Return on equity under 15%

Return on equity was 11.4% over the last twelve months and averaged 12.2% over five years; we look for 15% on both.

Return on capital under 10%

Return on invested capital was 8.6%, below the 10% that usually covers the cost of capital.

Return on equity above the industry

Labcorp's return on equity of 11.4% is above the Health Services median of -9.9%.

Earnings shrank over 5 years

Net income shrank 10.8% a year on average over the last five fiscal years.

Net margin below its 5-year average

Net margin was 6.9% over the last twelve months, against a 5-year average of 8.9%.

Net margin above the industry

Labcorp's net margin of 6.9% is above the Health Services median of -10.3%.

High debt

Debt is 66.1% of shareholders' equity, above the 40% we consider low.

Debt rising against equity

Debt to equity rose from 61.4% five years ago to 66.1%.

Debt covered by cash flow

Operating cash flow over the last twelve months equals 31.0% of total debt.

Interest well covered

Operating income covers interest expense 6.5 times.

Short-term assets cover short-term debts

Current assets are 1.41 times current liabilities.

Low bankruptcy risk

The Altman Z-score is 3.56; above 3 is the safe zone and below 1.8 the distress zone.

Pays a dividend

Labcorp paid dividends worth 0.8% of the share price over the last twelve months.

Yield below Treasuries

The 0.8% yield is below the 4.4% on a 1-year Treasury.

Yield below the top quarter

The top quarter of US dividend payers yield 3.8% or more; Labcorp yields 0.8%.

Dividend stability

Fewer than five years of dividend history.

Covered by earnings

Dividends take 23.6% of net income.

Covered by free cash flow

Dividends take 18.4% of free cash flow.