Labcorp Holdings LH reported adjusted earnings per share (EPS) of $3.84 in the first quarter of 2025. The figure rose 4.3% from the year-ago reported level.

The adjusted figure excludes the impacts of certain amortization expenses and restructuring charges, among others. The bottom line beat the Zacks Consensus Estimate by 2.9%. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)

On a GAAP basis, EPS in the first quarter was $2.52 compared with $2.69 in the year-ago period.

LH Q1 Revenues

Revenues in the quarter under review rose 5.3% year over year to $3.35 billion. However, the figure missed the Zacks Consensus Estimate by 2%.

The year-over-year increase was due to organic revenue growth of 2.1% and acquisitions (net of divestitures) of 3.7%, offset by a foreign currency translation loss of 0.5%.

Following the announcement, Labcorp shares edged up 0.2% in the pre-market session today.

Labcorp’s Q1 Performance by Segments

The company currently operates under two segments — Diagnostics Laboratories and Biopharma Laboratory Services (comprised of its Central Laboratories and Early Development Research Laboratories).

For the first quarter, Diagnostics Laboratories reported revenues of $2.63 billion, reflecting a 6% improvement year over year.

On an organic basis, revenues were up 1.6%. The company’s total volumes (measured by requisitions) increased 3%, as acquisition volumes contributed 2.1% and organic volumes rose 0.9%.

Biopharma Laboratory Services revenues rose 1.5% to $721.3 million in the first quarter. The year-over-year increase was primarily driven by organic growth of 2.6%, offset by a foreign currency translation loss of 1.1%.

LH’s Margin Performance

The gross margin expanded 9 basis points (bps) to 28.3% in the first quarter despite a 5.2% rise in the cost of revenues.

The adjusted operating income improved 3.4% year over year to $402 million. However, the adjusted operating margin contracted 23 bps year over year to 12%. This was due to a 7.4% rise in SG&A expenses ($546 million).

Labcorp’s Cash Position

Labcorp exited the first quarter with cash and cash equivalents of $369.4 million compared with $1.52 billion at the end of fourth-quarter 2024. Long-term debt totaled $5.57 billion, compared with $5.33 billion at the fourth quarter-end.

Cumulative cash inflow from operating activities at the end of the first quarter was $18.5 million compared with a cash outflow of $29.8 million at the end of 2024.

LH’s 2025 Guidance

Labcorp issued an updated 2025 guidance to reflect its first-quarter performance and full-year outlook. Total revenues for 2025 are expected to grow in the range of 6.7-8% (same as earlier). Diagnostics Laboratories revenues are expected to increase in the range of 6.5-7.7% (unchanged), while Biopharma Laboratory Services revenues are forecasted between 3% and 5% (also unchanged).

The Zacks Consensus Estimate for full-year revenues is pegged at $13.93 billion.

Meanwhile, Labcorp expects full-year adjusted EPS to be in the band of $15.70-$16.40 (previously $15.60-$16.40). The Zacks Consensus Estimate for the metric is pegged at $16.01.

The company expects 2025 free cash flow from continued operations to be in the range of $1.10-$1.25 billion (same as earlier).

Our View on Labcorp’s Stock

Labcorp exited the first quarter of 2025 with an earnings beat and revenues miss. However, both metrics were up on a year-over-year basis. Throughout the first quarter, the company continued to advance its pipeline of acquisitions and partnerships, and further expanded its test menu in four strategic areas, including oncology, women's health, autoimmune disease and neurology. Other innovative developments include the launch of its liquid biopsy test, Labcorp Plasma Complete. Even with a shifting macroeconomic environment, the company’s strong focus on diagnostics and drug development provides a strong foundation for continued success, which bodes well for the stock.

Meanwhile, the contraction of adjusted operating margin in the quarter was discouraging.

LH’s Zacks Rank & Key Picks

Labcorp currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks from the broader medical space are AngioDynamics ANGO, Integer Holdings Corporation ITGR and Boston Scientific BSX.

AngioDynamics, currently sporting a Zacks Rank #1 (Strong Buy), reported third-quarter fiscal 2025 adjusted EPS of 3 cents against the Zacks Consensus Estimate of a 13-cent loss. Revenues of $72 million beat the Zacks Consensus Estimate by 2%. You can see the complete list of today’s Zacks #1 Rank stocks here.

ANGO has an estimated fiscal 2026 earnings growth rate of 27.8% compared with the S&P 500 composite’s 10.5% growth. The company surpassed earnings estimates in each of the trailing four quarters, the average surprise being 70.9%.

Integer Holdings, sporting a Zacks Rank #1 at present, posted first-quarter 2025 adjusted EPS of $1.31, exceeding the Zacks Consensus Estimate by 3.1%. Revenues of $437.4 million surpassed the Zacks Consensus Estimate by 1.3%.

ITGR has an estimated long-term earnings growth rate of 20.8% compared with the industry’s 14.3% growth. The company’s earnings surpassed estimates in three of the trailing four quarters and missed on one occasion, the average surprise being 2.8%.

Boston Scientific, carrying a Zacks Rank #2 (Buy), reported a first-quarter 2025 adjusted EPS of 75 cents, which surpassed the Zacks Consensus Estimate by 11.9%. Revenues of $4.66 billion topped the Zacks Consensus Estimate by 2.3%.

BSX has an estimated 2025 earnings growth rate of 15.9% compared with the S&P 500 composite’s 11.9% growth. The company’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 8.8%.

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