In late February, Quest picked up privately held Athena Diagnostics for $740 million, paying a little under seven times Athena's revenue in the process. For Quest, this results in one less competitor and a 12-percentage-point boost in market share within the $750 million neurology testing market, in which it competes with LabCorp
Unlike the Athena pickup, Quest's move on Celera
Quest seems to be doing a good job balancing short-term gains with long-term growth. Athena is the near-term catalyst, while the addition and development of Celera's patents should strengthen Quest's position down the road. Utilization trends are rumored to be improving, likely giving share prices a near-term boost, but looming reimbursement reductions are sitting like a dark gray cloud on the horizon. I like this company's prospects, but my immediate concern is that share prices have climbed more than 6% in just the past week. Investors may want to keep Quest Diagnostics on their watchlist and see if a better entry point reveals itself.