LH · Health care(services-medical laboratories) · 10 years of annual accounts filed with the SEC · latest fiscal year ended 2025-12-31
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Labcorp Holdings Inc. reported revenue of $14.0 billion in fiscal 2025, after growing 4.3% a year over the previous 9 years. Its operating margin narrowed from 13.3% in 2016 to 9.9%. Of the $17.2 billion its operations generated over 10 years, 43.3% went to acquisitions and 35.5% to buybacks; the share count fell 19.7%. On the accounting screens, it passes 8 of 9 Piotroski tests, its Altman Z'' of 3.39 is in the safe zone and its Beneish M-score is below the -1.78 line; 1 of the six cross-checks between its statements fires.
Revenue, fiscal 202514.0B+4.3% a year over 9 years
Operating margin9.9%gross margin 28.8%
Return on invested capital—
Free cash flow after stock pay1.1B7.7% of revenue
Net debt ÷ EBITDA2.4×net debt 5.1B
Piotroski F-score8/9tests of improvement passed
Is it growing?
Revenue and the operating income it turns into. Growth that does not reach operating income is growth bought with margin.
RevenueOperating income
05.0B10.0B15.0B
2016Revenue 9.6BOperating income 1.3B
2017Revenue 10.3BOperating income 1.3B
2018Revenue 11.3BOperating income 1.3B
2019Revenue 11.6BOperating income 1.3B
2020Revenue 14.0BOperating income 2.4B
2021Revenue 13.1BOperating income 3.0B
2022Revenue 11.9BOperating income 1.4B
2023Revenue 12.2BOperating income 725.6M
2024Revenue 13.0BOperating income 1.1B
2025Revenue 14.0BOperating income 1.4B
2016201720182019202020212022202320242025
Compound growth a year
3 yrs
5 yrs
9 yrs
Revenue
+5.6%
-0.0%
+4.3%
Operating income
-1.2%
-10.8%
+1.0%
Net income
-11.8%
-10.8%
+2.3%
Earnings per share
-9.2%
-8.0%
+4.9%
Free cash flow per share
-4.8%
-4.3%
+5.6%
Dividend per share
+10.5%
—
—
Shares
-2.9%
-3.1%
-2.4%
Falling shares are buybacks: each remaining share owns more of the company.
Does it earn more than its capital costs?
Margins say how much of each sale is kept; return on invested capital says how much the business earns on the money it needs to operate. Growth only creates value when that return is above the cost of the capital.
Needs a cost of capital, which comes from the valuation below.
Return on equity
10.2%
Return on assets
4.8%
Asset turnover
0.76×
Overheads (SG&A)
15.9% of revenue
Is the profit cash, and where does the cash go?
Net income is an accounting opinion; free cash flow is what was left in the bank after investing. Stock-based pay does not leave the bank — shareholders pay it through dilution — so it is shown taken off as well.
Net incomeFree cash flowAfter stock-based pay
01.0B2.0B3.0B
2016Net income 711.8MFree cash flow 918.2MAfter stock-based pay 808.6M
2017Net income 1.2BFree cash flow 1.2BAfter stock-based pay 1.1B
2018Net income 883.7MFree cash flow 925.6MAfter stock-based pay 834.0M
2019Net income 823.8MFree cash flow 1.0BAfter stock-based pay 937.5M
2020Net income 1.6BFree cash flow 1.8BAfter stock-based pay 1.6B
2021Net income 2.4BFree cash flow 2.7BAfter stock-based pay 2.6B
2022Net income 1.3BFree cash flow 1.5BAfter stock-based pay 1.4B
2023Net income 418.0MFree cash flow 874.1MAfter stock-based pay 745.4M
2024Net income 746.0MFree cash flow 1.1BAfter stock-based pay 979.2M
2025Net income 876.5MFree cash flow 1.2BAfter stock-based pay 1.1B
2016201720182019202020212022202320242025
Where 10 years of operating cash went, 2016–2025
17.2B generated by the business. Each band is its share of that total.
Reinvested in the business 23%4.0B
Acquisitions 43%7.4B
Dividends 5%933.0M
Share buybacks 35%6.1B
More than it generated: funded with cash or new debt -7%-1.3B
Over the same years it paid 1.2B in stock. The share count fell 19.7%. 5.0B of the buybacks went beyond offsetting that dilution.
Per share
Earnings per shareFree cash flow per shareDividend per share
$0.00$10.00$20.00$30.00
2016Earnings per share $6.82Free cash flow per share $8.80
2017Earnings per share $11.81Free cash flow per share $11.41
2018Earnings per share $8.61Free cash flow per share $9.02
2019Earnings per share $8.35Free cash flow per share $10.59
2020Earnings per share $15.88Free cash flow per share $17.89Dividend per share $0.00
2021Earnings per share $24.38Free cash flow per share $27.57Dividend per share $0.00
2022Earnings per share $13.96Free cash flow per share $16.67Dividend per share $2.13
2023Earnings per share $4.77Free cash flow per share $9.98Dividend per share $2.90
2024Earnings per share $8.84Free cash flow per share $12.98Dividend per share $2.88
2025Earnings per share $10.46Free cash flow per share $14.39Dividend per share $2.87
2016201720182019202020212022202320242025
Shares outstanding
Diluted shares
80.0M90.0M100.0M110.0M
2016Diluted shares 104.3M
2017Diluted shares 103.9M
2018Diluted shares 102.6M
2019Diluted shares 98.6M
2020Diluted shares 98.0M
2021Diluted shares 97.5M
2022Diluted shares 91.6M
2023Diluted shares 87.6M
2024Diluted shares 84.4M
2025Diluted shares 83.8M
2016201720182019202020212022202320242025
How strong is the balance sheet?
Debt is not bad in itself; debt the business cannot service in a bad year is. Net debt is debt minus cash, and below zero the company holds more cash than it owes.
Net debt
02.0B4.0B6.0B8.0B
2016Net debt 5.4B
2017Net debt 6.4B
2018Net debt 5.6B
2019Net debt 5.9B
2020Net debt 4.5B
2021Net debt 3.9B
2022Net debt 5.0B
2023Net debt 4.5B
2024Net debt 4.8B
2025Net debt 5.1B
2016201720182019202020212022202320242025
Net debt ÷ EBITDA
2.4×
Interest coverage
6× operating income ÷ interest
Current ratio
1.42 current assets ÷ current liabilities
Cash conversion cycle
44 days collects in 55d, stock 20d, pays in 31d
Three classic screens of the accounts
Each asks a different question of the same statements — is it improving, does it look like a company heading for distress, do the accounts resemble ones that were manipulated. None is a verdict; each shows what moves it.
Piotroski F-score
Is the business improving? Nine yes-or-no tests, this year against last.
8of 9 tests passed
✓ProfitableReturn on assets above zeropassed
✓Cash from operationsOperating cash flow above zeropassed
✓Profitability improvedReturn on assets higher than a year beforepassed
✓Profit backed by cashOperating cash flow above net income (low accruals)passed
✓Less long-term debtLong-term debt as a share of assets fellpassed
✕More liquidCurrent ratio higher than a year beforefailed
✓No new sharesShare count did not growpassed
✓Better gross marginGross margin higher than a year beforepassed
✓Sells more per assetAsset turnover higher than a year beforepassed
Where it misleads: it measures change, not level. An excellent business that stood still for a year scores low; a poor one recovering from a disaster scores high.
Altman Z''-score
Does the balance sheet look like those of companies that went bankrupt?
3.39safe zone
1.12.6
Working capital ÷ assets 0.07 × 6.56+0.43
Retained earnings ÷ assets 0.47 × 3.26+1.53
Operating income ÷ assets 0.08 × 6.72+0.51
Equity ÷ liabilities 0.88 × 1.05+0.93
Where it misleads: buybacks. A company that returns so much cash that its equity turns small or negative sinks the last two ratios without being anywhere near bankruptcy. Banks and insurers do not fit the model at all.
Beneish M-score
Do the accounts resemble those of companies that manipulated their earnings?
-2.55below the -1.78 line
-1.78
Receivables vs sales 1.01+0.93
Gross margin slipping 0.97+0.51
Soft assets 1.07+0.43
Sales growth 1.07+0.96
Slower depreciation 0.96+0.11
Overheads vs sales 0.93-0.16
Profit not in cash -0.04-0.19
Leverage rising 0.91-0.30
Where it misleads: fast growth and acquisitions. Sales growth carries a heavy weight, so a company growing 50% a year scores like a suspect without having done anything. It is a screen from a 1999 study, not an accusation.
Where the statements disagree
Cross-checks between the income statement, the balance sheet and the cash flow for the latest year, each with the benign reading and the worrying one.
Capital spending (434M) is well below depreciation (681M).
Benign
Mature assets, or a business that has become less capital-intensive.
Worrying
Under-investing: today's profit is being held up by consuming tomorrow's capacity.
What is it worth, under which assumptions?
A company is worth the cash it will generate, brought back to today. This model projects revenue with growth that fades over the years, applies a free cash flow margin, and discounts the result at the cost of capital. Every assumption says where it came from, and all of them can be changed.
The SEC accounts lack the lines needed for revenue, free cash flow or the share count, so there is no DCF for this company.
What it has filed lately
The last twelve months at the SEC, most important first: annual and quarterly reports, events, large holders and insiders.
Every Form 4 filed in the last twelve months, read line by line: 6 filings by 6 people. Open-market purchases and sales are counted apart from awards, option exercises and shares withheld for taxes.
Bought on the open market—none in the period
Sold on the open market$2.4M2 sale(s) by 2 insider(s)
Under pre-arranged plans100%of the sales followed a 10b5-1 plan set months earlier
A Form 4 says what happened, when, how many shares and at what price. It does not say why: a sale can be diversification, a tax bill or a plan fixed months earlier, and an award is pay, not a purchase. Nothing here is a reason to buy or sell anything.
Which large funds report holding it
From the Form 13F of the 28 institutions followed on this site, as of the end of their last reported quarter. A 13F is filed up to 45 days later and shows only long positions in US-listed shares.
Accounts from the company's own SEC filings; lines some companies do not report are shown as a dash rather than estimated. The risk-free rate is the 10-year US Treasury yield. A DCF is a way of making assumptions explicit, not a forecast: it states what the company would be worth if the assumptions held. The scores are screens that point where to look, not verdicts. Nothing here is a recommendation to buy or sell.
