The share price of leading diagnostic information services provider Quest Diagnostics (DGX) has been surging as the spread of the COVID-19 Delta variant across the United States increases COVID-19 testing volume. However, given its uncertain growth outlook and the growing competition in the COVID-19 diagnostic testing space, can the stock keep rallying? Let’s discuss.Diagnostic testing provider Quest Diagnostics Incorporated (NYSE:DGX) in Madison, N.J., offers diagnostic information and risk assessment services primarily under the Quest Diagnostics, ExamOne, Dermpath Diagnostics, and Quanum brand names.
Although recovery from the pandemic caused a slowdown in its COVID-19 testing business in the first half of the year, the company has been seeing an uptick in testing lately with the rapid spread of the more contagious coronavirus Delta variant across the U.S. Consequently, its share price has soared 8% over the past month.
While a faster than expected recovery in DGX’s base business could normalize its operations, further growth may be challenging for the company, given the rising competition in the diagnostics market.