Quest Diagnostics Incorporated
Thesis
Quest Diagnostics is facing significant downward pressure on revenue due to competition from LabCorp and rising cost pressures that undermine its cost savings initiatives. The company's reliance on acquisitions to maintain revenue levels has resulted in overstated free cash flow and a declining return on net operating assets. The valuation suggests a target price of $35 per share, indicating substantial downside from the current price.
Did it work?
The short thesis predicted substantial downside to a $35 target, but the stock's price performance since the pitch is reported as -260.1%, which is nonsensical as a return figure and almost certainly reflects a data error (a stock cannot lose more than 100% of its price). Interpreting the sign convention, the price appears to have risen dramatically rather than fallen, decisively invalidating the short thesis over the 136-month horizon. Given the implausible magnitude, confidence is medium rather than high, but the direction of the outcome clearly contradicts the short call.