--- title: "Diagnostic Laboratories Industry" description: "17 SEC filers are classified under the Standard Industrial Classification code that describes the diagnostic laboratories industry." canonical: https://www.getswoopr.com/stocks/industries/health-care/diagnostic-laboratories/ source: "Swoopr Investment: https://www.getswoopr.com" --- # Diagnostic Laboratories Industry ## Direct Answer 17 SEC filers are classified under the Standard Industrial Classification code that describes the diagnostic laboratories industry, and their latest annual reports show $30.8 billion of combined revenue and a median operating margin of -21.1%. Investors should still evaluate its revenue model, industry-specific KPIs, valuation framework and the risks that can change the group's economics. ## Industry Overview Diagnostic laboratories run clinical tests for hospitals, physicians and patients and are paid by insurers and Medicare per test. Volume, pricing and payer mix decide earnings, and genetic and specialty tests add growth. The first numbers to compare across companies here are test volume and revenue per requisition, payer mix and operating margin. ## Key Industry Metrics - **Test volume and revenue per requisition**: Number of tests ordered and average payment per order. Volume shows demand; revenue per requisition shows pricing and the mix of routine versus specialty tests. - **Payer mix**: Split of revenue among commercial insurers, Medicare, Medicaid and patients. Payment rates differ widely, so shifts change profit. - **Operating margin**: Share of revenue left after lab, logistics and billing costs. Because labs have high fixed costs, volume and automation move margin. - **Share of specialty testing**: Portion of testing in higher-value areas such as genetics and oncology. These tests generally pay more than routine ones, so a mix shift supports revenue per test. - **Days sales outstanding**: Average days to collect payment after billing. A rising figure signals slower payment or billing problems, which tie up cash. ## Primary Macro Drivers - **Aging population and testing demand**: Older people need more tests, so a growing older population lifts test volume and revenue per requisition across routine and specialty tests. - **Reimbursement rates**: Medicare and insurers set payment per test, so changes move revenue per requisition and operating margin directly. - **Hospital outreach partnerships**: Partnerships with hospitals bring outreach testing volume, which supports test volume and lowers the cost to serve each test. - **New test adoption**: New genetic and specialty tests carry higher prices, so adoption lifts revenue per requisition and the share of specialty testing. ## Major Risks - **Medicare payment cuts**: Lower Medicare fee schedules reduce revenue on a large share of tests, with limited cost offset; watch final fee schedule rules and revenue per requisition. - **Pricing pressure from insurers**: Large insurers can steer volume to preferred labs and set low rates, which lowers revenue per requisition; watch payer mix and contract news. - **Billing and compliance exposure**: Billing mistakes or improper practices can lead to repayments and penalties; watch legal notes and days sales outstanding. - **Competition**: Rivals including hospital labs and low-cost entrants compete on price and service; watch test volume and share in specialty testing. ## Industry Characteristics | Characteristic | Profile | | --- | --- | | Cyclicality | Defensive | | Capital Intensity | Medium | | Regulatory Intensity | High | | Industry Maturity | Mature | | Geographic Importance | U.S. | ## Diagnostic Laboratories Filers in the SEC Record 17 companies with annual reports in the dataset are classified by the SEC in the Standard Industrial Classification code 8071. Their latest fiscal years end in 2025, and together they reported $30.8 billion of revenue. Median revenue growth over the prior year was 16.9%. Median operating margin was -21.1% and median net margin -18.8%. Median total liabilities were 28% of total assets, and 3 of 17 reported a profit in their latest year. | Company | Revenue | Growth | Operating margin | Net margin | Year | | --- | --- | --- | --- | --- | --- | | [Labcorp Holdings Inc.](https://www.getswoopr.com/stocks/companies/labcorp/) | $14.0 billion | 7.2% | 9.9% | 6.3% | FY 2025 | | [Quest Diagnostics Inc](https://www.getswoopr.com/stocks/companies/quest-diagnostics/) | $11.0 billion | 11.8% | 14.1% | 9.0% | FY 2025 | | [Natera, Inc.](https://www.getswoopr.com/stocks/companies/natera-inc/) | $2.3 billion | 35.9% | -13.4% | -9.0% | FY 2025 | | [Guardant Health, Inc.](https://www.getswoopr.com/stocks/companies/guardant-health-inc/) | $982 million | 32.9% | -44.5% | -42.4% | FY 2025 | | [Caris Life Sciences, Inc.](https://www.getswoopr.com/stocks/companies/caris-life-sciences-inc/) | $812 million | 97.0% | 5.6% | -8.4% | FY 2025 | | [Caredx, Inc.](https://www.getswoopr.com/stocks/companies/caredx-inc/) | $380 million | 13.8% | -8.1% | -5.6% | FY 2025 | | [Castle Biosciences Inc](https://www.getswoopr.com/stocks/companies/castle-biosciences-inc/) | $344 million | 3.7% | -12.4% | -7.0% | FY 2025 | | [Fulgent Genetics, Inc.](https://www.getswoopr.com/stocks/companies/fulgent-genetics-inc/) | $323 million | 13.8% | -28.2% | -18.8% | FY 2025 | The 8 largest of 17 by revenue. Source: each company's own annual report as filed with the SEC (XBRL data), figures in U.S. dollars. A company's SIC code reflects its main business as the SEC records it, so it can differ from how an index provider or analyst classifies the company, and a diversified group appears under only one code. ## Where to Go Next The Diagnostic Laboratories guide describes how the industry earns money, what to measure and what can go wrong. 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Key performance indicators for the Diagnostic Laboratories industry include: Test volume and revenue per requisition, Payer mix, Operating margin, Share of specialty testing, Days sales outstanding. Which matter most depends on the company's model, so compare them across several companies rather than relying on one. How cyclical is the Diagnostic Laboratories industry? The Diagnostic Laboratories industry is generally defensive, meaning demand tends to remain relatively stable regardless of the economic cycle. Companies in this space can provide portfolio stability during recessions, though growth may lag in strong expansions. What are the biggest risks in the Diagnostic Laboratories industry? The primary risks for Diagnostic Laboratories companies include: Medicare payment cuts, Pricing pressure from insurers, Billing and compliance exposure, Competition. Investors should assess each company's exposure to these factors and its track record of navigating them. **[Swoopr Editorial Team](https://www.getswoopr.com/authors/swoopr-editorial-team/)** Swoopr's editorial team produces independent investment education content reviewed for accuracy and clarity. We do not provide personalized financial advice. See our [editorial policy](https://www.getswoopr.com/legal/editorial-policy/) and [corrections policy](https://www.getswoopr.com/legal/corrections-policy/).