As it turns out, last month's temporary swoon in lab-testing firm LabCorp's (NYSE:LH) stock price was a buying opportunity. However, recent results were "outstanding by every measure" and could signal even better things to come.

LabCorp's first-quarter results released yesterday measured up on many levels, as it was able to leverage 14% sales gains into 29% earnings-per-share growth. Management expects a similar level of top- and bottom-line improvements for the full year, as it appears March's Aetna (NYSE:AET) contract loss is being more than offset from the one it won with UnitedHealth Group (NYSE:UNH) earlier in the year.

As it stands, LabCorp is now trading at just under 19 times its guidance for fiscal 2007. That may seem pricey, seeing as the stock is again bumping up against its highs for the year, but it could turn out to be a bargain entry point if growth continues to ramp as it has been.

After years of combining low single-digit organic growth with the aggressive buyout of competitors, annual sales, earnings, and cash flow growth at LabCorp had fallen below 10% over the past three years. This calls into question the sustainability of what should turn out to be an impressive year, but management reckons its "strategy of true partnership with managed care companies is working, and that entering into our ground-breaking ten-year partnership with UnitedHealth care was the right thing to do."

LabCorp is currently touting the UnitedHealth deal, but skeptics surmise it had to offer many concessions to win the business from an archrival. In addition, fewer acquisition candidates exist today, with BioReference Labs (NASDAQ:BRLI) and MEDTOX (NASDAQ:MTOX) remaining as smaller players in the space.

Other health-plan operators such as Cigna (NYSE:CI) and Humana (NYSE:HUM) continue with their current lab-testing relationships, but could increasingly move to exclusive contracts if the economics work in their favor. Time will tell if focusing on the managed care industry will help or hinder LabCorp, but so far the results are impressive.

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Fool contributor Ryan Fuhrmann has no financial interest in any company mentioned. Feel free to email him with feedback or to discuss any companies mentioned further. The Fool has an ironclad disclosure policy.