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Quest Diagnostics Incorporated (DGX)
Intrinsic Value (DCF)
Current$190.26
→
Intrinsic$88.21
-54%
$42.09$88.21$175.88
Market implies 21% growth for 5 years
Current price reflects execution expectations above 8% growth — not unreasonable for quality businesses.
At $190, the market prices in continued strong cash flow growth (21%) — likely reflecting buybacks, margin stability, and ecosystem strength.
Range: Bear $42 → Bull $176. Current price implies expectations above the base case, closer to bull expectations.
| Discount ↓Growth → | 4% | 6% | 8% | 10% |
|---|---|---|---|---|
| 8% | $115 | $131 | $148 | $166 |
| 10% | $66 | $77 | $88 | $101 |
| 12% | $38 | $46 | $55 | $64 |
| 14% | $21 | $27 | $34 | $41 |
Bull Case
- Bull case ($176) with 10% growth, 9% discount rate
- Conservative 8% growth assumption is achievable based on track record
Bear Case
- Bear case ($42) implies 78% downside at 6% growth, 12% discount
- Price reflects 21% growth expectations vs 8% historical — high bar to clear
- Trading 54% above base case — execution must exceed assumptions to justify
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5-Year Free Cash Flow Projection
Year 1$981.72M
Year 2$1.06B
Year 3$1.15B
Year 4$1.24B
Year 5$1.34B
Terminal$19.65B
📐 Model Inputs
Growth Rate8.0%5Y CAGR (cascade: 5Y→3Y→TTM)
Discount Rate10.0%WACC estimate
Terminal Growth3.0%Perpetuity rate
Base Free Cash Flow$909.00MTTM actual
Bear g×0.8, r+2%
Base Historical CAGR
Bull g×1.2, r−1.5%
DCF estimates based on historical growth rates extrapolated forward. See FAQ below for full methodology.