The financial performance of two prominent medical companies, Astrana Health (NASDAQ:ASTH) and Quest Diagnostics (NYSE:DGX), is under scrutiny as analysts assess which company offers better investment potential. The analysis focuses on profitability, earnings, risk, dividends, and institutional ownership, providing a comprehensive view of their market positions.
Earnings and Financial Valuation
A comparative examination of the revenue and earnings per share reveals significant differences between the two companies. As of the latest financial reports, Quest Diagnostics boasts a stronger earnings profile, which is reflected in its higher revenue figures. However, Astrana Health shows promise with a notable potential upside according to analysts, suggesting that it may be an attractive option for future growth.
The consensus target price for Quest Diagnostics stands at $197.27, indicating a potential upside of 12.99%. In contrast, Astrana Health has a target price of $41.33, suggesting a more substantial potential upside of 45.39%. This data points to a more favorable outlook for Astrana Health in the eyes of market analysts.
Profitability and Risk Assessment
Profitability metrics such as net margins, return on equity, and return on assets show that Quest Diagnostics outperforms Astrana Health in several areas. Notably, Quest Diagnostics has a beta of 0.64, indicating that its share price is 36% less volatile than the S&P 500. In comparison, Astrana Health has a beta of 0.87, suggesting a 13% lower volatility. These figures illustrate a more stable investment in Quest Diagnostics, whereas Astrana Health may present more risk but with higher potential rewards.
In terms of ownership, institutional investors hold 88.1% of Quest Diagnostics shares, compared to 52.8% of Astrana Health. Furthermore, insider ownership is notably higher at Astrana Health, with 20.0% of shares held by company insiders versus 8.2% for Quest Diagnostics. This disparity in ownership can imply greater confidence among insiders in Astrana Health’s future performance.
Both companies have distinct operational focuses. Quest Diagnostics, established in 1967 and headquartered in Secaucus, New Jersey, provides a wide range of diagnostic testing and services across the United States and internationally. Its offerings include clinical testing, anatomic pathology, and healthcare information technology solutions.
Meanwhile, Astrana Health, headquartered in Alhambra, California, operates as a physician-centric, technology-driven healthcare management company. The company rebranded from Apollo Medical Holdings, Inc. in February 2024 and specializes in integrated, value-based healthcare services, targeting efficient care delivery through its proprietary population health management platform.
In conclusion, while Quest Diagnostics leads in several key performance metrics, including profitability and stability, Astrana Health presents a compelling case for potential growth, particularly in its upside potential as highlighted by analysts. Investors looking to navigate the healthcare space may find opportunities in both companies, depending on their risk tolerance and investment strategy.
