Quest Still Beats Nasdaq, but Medicare Cuts Cloud Rally

Quest Diagnostics closed at $234.76 on September 22, down 4.1% that day but still up about 35.3% from its December 31, 2025 close. The Nasdaq Composite had gained about 17.2% over the same period, leaving Quest well ahead.

That comparison uses closing price levels, not total returns that include dividends. It also shows the effect of Tuesday’s drop: a Barchart comparison published before the market opened that day put Quest’s year-to-date gain at 41.1%.

The selloff followed preliminary Medicare laboratory payment rates released by the Centers for Medicare & Medicaid Services on September 21. CMS said 1,171 of roughly 1,500 test codes with private-payor data had preliminary rates below their 2026 levels.

The proposal does not mean every lab test will face a 15% cut. Federal law caps annual payment reductions for an individual test at 15% through 2029, while CMS says its new rates aim to bring Medicare payments closer to private-market rates.

CMS estimates the proposed rates would save $1 billion a year. The agency is taking public comments for 30 days, expects to finalize the 2027 schedule in November, and plans for rates to take effect January 1, 2027.

Quest’s recent results offer a counterweight to that policy risk. In July, the company reported second-quarter revenue of $3.04 billion, up 10.2% from a year earlier, and adjusted earnings of $3.12 per share, up 19.1%.

Quest also raised its 2026 adjusted earnings forecast to $11.05-$11.25 per share. Investors will now weigh that growth outlook against the final Medicare rates and how the changes affect payments for the tests Quest performs.