NYSE:LH
LABCORP HOLDINGS INC.
A major global diagnostic laboratory provider generating $13.95B in revenue with strong operational cash flow of $1.64B.
Key Metrics
Investment Thesis
Bull Case
Investors may buy LH due to its essential nature as a healthcare utility that generates consistent cash flow regardless of economic cycles, supported by a diversified client base that reduces single-client concentration risk. The company's recent profit recovery from $419.2M in 2023 to $877.7M in 2025 suggests successful operational leverage and margin expansion strategies are paying off.
Bear Case
Potential buyers should avoid LH given the significant decline in revenue from $14.88B in 2022 to $12.16B in 2023 which indicates sensitivity to payer mix changes or volume contractions. The substantial cash outflows from financing (-$1.46B) and investing (-$1.19B) combined with a retained earnings deficit of $8.64B suggest the company is aggressively deleveraging or funding major growth initiatives that may not yet be accretive.
About LABCORP HOLDINGS INC.
LabCorp Holdings Inc. operates as a leading diagnostic laboratory provider serving healthcare systems, reference labs, and independent physician practices globally. The company delivers comprehensive clinical testing solutions including pathology, microbiology, and genetics across North America and international markets. Key revenue drivers include high-volume routine testing, specialized molecular diagnostics, and digital health platform integration.
Analysis
Management Discussion
Management successfully navigated a challenging revenue environment where total revenue grew to $13.95B in 2025 following declines in prior years, while generating robust operating cash flow of $1.64B and net profit of $877.7M. The company demonstrated strong balance sheet management with significant capital expenditures of $434.5M likely directed toward modernizing infrastructure and acquiring new market share to offset the decline in revenue from 2023.
Industry Overview
The diagnostic testing industry is characterized by high barriers to entry due to regulatory requirements, strict quality standards, and the capital intensity required for laboratory automation and IT infrastructure. Consolidation is ongoing as smaller labs struggle with reimbursement pressures and technology costs, favoring larger entities like LH that can achieve economies of scale.
Financial Statements
Income Statement
Balance Sheet
Cash Flow
| Metric | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|
| Revenue | $14.88B | $12.16B | $13.01B | $13.95B |
| Cost of Revenue | $10.49B | $8.80B | $9.38B | $9.94B |
| Gross Profit | $4.39B | $3.36B | $3.62B | $4.01B |
| Operating Expenses | $2.61B | $2.64B | $2.54B | $2.63B |
| Operating Income | $1.77B | $725.6M | $1.09B | $1.38B |
| G&A | $2.00B | $2.02B | $2.23B | $2.22B |
| Stock-Based Comp | $144.1M | $128.7M | $116.7M | $125.8M |
| D&A | $633.9M | $577.3M | $643.5M | $681.1M |
| Depreciation | $374.6M | $357.5M | $387.1M | — |
| Amortization | $259.3M | $219.8M | $256.4M | $280.0M |
| Other OpEx | $614.6M | $617.9M | $307.7M | $411.5M |
| Non-Operating Income | $-452.9M | $-221.6M | $-457.0M | $-655.8M |
| Interest Expense | $180.3M | $199.6M | $208.3M | $224.1M |
| Pre-Tax Income | $1.32B | $504.0M | $629.7M | $728.9M |
| Income Tax | $302.0M | $188.5M | $212.4M | $229.8M |
| Continuing Ops | $1.02B | $380.4M | $747.1M | $877.7M |
| Discontinued Ops | $261.6M | $38.8M | $0 | $0 |
| Net Income | $1.28B | $419.2M | $747.1M | $877.7M |
| Minority Interest | $1.5M | $1.2M | $1.1M | $1.2M |
| Net to Common | $1.28B | $418.0M | $746.0M | $876.5M |
| Metric | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|
| Current Assets | $4.62B | $3.77B | $4.81B | $4.02B |
| Cash & Equivalents | $430.0M | $536.8M | $1.52B | $532.3M |
| Accounts Receivable | $2.22B | $1.91B | $1.94B | $2.10B |
| Inventory | $470.6M | $474.6M | $493.2M | $534.7M |
| Prepaid Expenses | — | — | — | $692.8M |
| Other Current Assets | $1.50B | $840.7M | $850.5M | $156.9M |
| Long-Term Assets | $15.53B | $12.96B | $13.57B | $14.37B |
| PP&E (Net) | $2.96B | $2.91B | $3.05B | $3.08B |
| Intangibles | $3.95B | $3.34B | $3.49B | $3.60B |
| Goodwill | $8.12B | $6.14B | $6.37B | $6.79B |
| Operating Leases | $773.6M | $737.1M | $784.5M | $803.9M |
| Other LT Assets | $-267.6M | $-173.7M | $-116.0M | $101.3M |
| Total Assets | $20.16B | $16.73B | $18.38B | $18.39B |
| Current Liabilities | $3.08B | $3.23B | $3.33B | $2.82B |
| Accounts Payable | $934.8M | $827.5M | $875.8M | $840.8M |
| Current Debt | — | — | — | $500.1M |
| Current Leases | $185.5M | $165.8M | $184.6M | $191.1M |
| Other Current Liab | $889.4M | $1.43B | $1.40B | $443.7M |
| Long-Term Liabilities | $6.96B | $5.61B | $6.98B | $6.93B |
| Long-Term Debt | $5.04B | $4.05B | $5.33B | $5.08B |
| LT Operating Leases | $679.7M | $648.9M | $676.3M | $682.6M |
| Other LT Liab | $1.24B | $905.8M | $974.8M | $1.17B |
| Total Liabilities | $10.04B | $8.83B | $10.31B | $9.76B |
| Shareholders' Equity | $10.12B | $7.89B | $8.07B | $8.64B |
| Retained Earnings | $10.58B | $7.89B | $8.30B | $8.64B |
| AOCI | $-493.2M | $-59.3M | $-261.6M | $-27.6M |
| Total L&E | $20.16B | $16.73B | $18.38B | $18.39B |
| Metric | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|
| Net Income (CFO) | $1.28B | $419.2M | $747.1M | $877.7M |
| Non-Cash Adjustments | $524.0M | $988.7M | $903.7M | $1.03B |
| Working Capital Changes | $151.3M | $-80.2M | $-65.0M | $-268.5M |
| Cash from Operations | $1.96B | $1.33B | $1.59B | $1.64B |
| Capital Expenditures | $481.9M | $453.6M | $489.9M | $434.5M |
| Cash from Investing | $-1.65B | $-1.17B | $-1.37B | $-1.19B |
| Debt Issuances | $0 | — | — | — |
| Share Buybacks | $1.10B | $1.00B | $250.1M | $450.0M |
| Dividends Paid | — | — | $243.1M | $240.7M |
| Cash from Financing | $-1.32B | $-59.3M | $779.9M | $-1.46B |
| FX Effect | $-24.2M | $9.9M | $-17.0M | $24.1M |
| Net Change in Cash | $-1.04B | $106.8M | $981.9M | $-986.4M |
| Beginning Cash | $1.47B | $320.6M | $536.8M | $1.52B |
| Ending Cash | $430.0M | $536.8M | $1.52B | $532.3M |
Frequently Asked Questions
How does LABCORP HOLDINGS INC. make money?
The company's financials reflect a diversified diagnostic services model driven by high-margin routine testing volumes, specialized molecular and genetic testing contracts, and reference laboratory partnerships that leverage its extensive network of automated analyzers and pathology expertise.
What are the main risks for LH?
Laboratory testing faces persistent regulatory scrutiny regarding billing compliance and reimbursement rates which could impact operating margins, potential consolidation in the healthcare sector may lead to volume loss if clients seek lower-cost providers, supply chain disruptions for critical reagents and equipment could halt operations, and high debt levels with $5.08B in long-term debt create vulnerability during rising interest rate environments.
What is LH's competitive advantage?
LH possesses a massive installed base of proprietary laboratory equipment creating high switching costs for healthcare clients, an unparalleled global footprint enabling rapid specimen transport and consistent quality control, and deep data analytics capabilities that provide actionable insights to hospital systems reducing their overall cost of care.
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Not financial advice. All content is for informational purposes only. Data may contain errors. Consult a qualified financial advisor before making investment decisions.