Business Analysis of LabCorp

 Analyze Historical Performance, Strategic Priorities, And Business Improvement Opportunities of LabCorp

Business Overview

Laboratory Corporation of America Holdings operates as an independent clinical laboratory company worldwide. It operates through two segments, LabCorp Diagnostics and Covance Drug Development. The company offers a range of clinical laboratory tests and procedures, such as blood chemistry analyses, urinalyses, blood cell counts, thyroid tests, Pap tests, hemoglobin A1C, PSA, tests for sexually-transmitted diseases, HCV tests, vitamin D, microbiology cultures and procedures, and alcohol and other substance-abuse tests that are used by hospitals, physicians and other healthcare providers and commercial clients to assist in the diagnosis, monitoring and treatment of diseases and medical conditions through the examination of substances in blood, tissues, and other specimens. It also provides specialty testing services in the areas of women's health, allergy, diagnostic genetics, cardiovascular disease, infectious disease, endocrinology, oncology, coagulation, pharmacogenetics, toxicology, and pain management; and esoteric testing, cancer diagnostics, and other complex procedures. In addition, the company provides drug development solutions, as well as laboratory testing services. Further, it provides its testing services through a sales force to the managed care organizations, biopharmaceutical companies, governmental agencies, physicians and other healthcare providers, hospitals and health systems, employers, patients and consumers, contract research organizations, food and nutritional companies, and independent clinical laboratories. The company has collaboration with university, hospital and academic institutions, such as Duke University, Johns Hopkins University, Boston University, Columbia University, The Mount Sinai Hospital, the University of Tennessee, and Yale University to license and commercialize new diagnostic tests. Laboratory Corporation of America Holdings was founded in 1971 and is headquartered in Burlington, North Carolina.

LabCorp

LabCorp


R&P Rank: 301
Sector: Healthcare Services
Industry:Healthcare Research Services
H.Q Location:North Carolina
Website: www.labcorp.com
Company Address:
358 S MAIN ST, BURLINGTON NC 27215
Ph:336-229-1127

Business Analysis of LabCorp

The Healthcare Services Sector is witnessing a major shakeup, new age business models in the industry are transforming both customers and businesses. Faced with this uncertainity, companies are investing resources to transform their business. An in-depth business analysis is a valuable resource to identify and articulate the need for a business model change. At R&P Research we believe, the starting point for a business analysis is Benchmarking. Business benchmarking can be done at various levels: 1) Industry Benchmarking 2) Peer Benchmarking 3) Disruptors Benchmarking. In this report, we share the snapshot of how LabCorp compares against the industry on the major performance indicators. This analysis, along with peer group/disruptors benchmarking and revenue model understanding can help identify growth and cost optimization opportunities to maximize the value delivered by LabCorp to its stakeholders. R&P Research Industry Intelligence Platform provides historical data for last 15 years with an easy to use benchmarking interface for an in-depth comparative business analysis.

Here is the performance snapshot of LabCorp with an interactive chart.

  1. Revenue Growth: LabCorp reported a revenue growth of 11.1% year-on-year during 2016. Healthcare Research Services Industry grew at 14.8% in the same period
  2. COGS share of Revenues: As a percentage of revenue, LabCorp spent 67.0% of its total revenues on COGS. Healthcare Research Services industry average (COGS share of revenue) in the same period was 68.6%
  3. R&D share of Revenues: LabCorp R&D share of Revenues details are not available because either company does not share the data or we do not have it
  4. SG&A share of Revenues: As a percentage of revenue, LabCorp spent 16.9% of its total revenues on Sales, Marketing, and General Administration (SG&A). Healthcare Research Services industry average SG&A spending in the same period was 16.2%
  5. Inventory share of Revenues: As a percentage of revenue, LabCorp spent 2.1% of its total revenues on Inventories. Healthcare Research Services industry average Inventory spending in the same period was 1.9%
  6. Accounts Payable share of Revenues: As a percentage of revenue, LabCorp invested 5.3% of its total revenues on Accounts Payable (A/P) Healthcare Research Services industry average Accounts Payable investment in the same period was 10.4%
  7. Accounts Receivable share of Revenues: As a percentage of revenue, LabCorp invested 15.8% of its total revenues on Accounts Receivable (A/R). Healthcare Research Services industry average Accounts Receivable investment in the same period was 21.6%
  8. PP&E share of Revenues: As a percentage of revenue, LabCorp invested 17.8% of its total revenues on Property, Plants, and Equipments (PP&E). Healthcare Research Services industry average PPE investment in the same period was 15.2%
  9. Intangibles share of Revenues: As a percentage of revenue, LabCorp invested 101.9% of its total revenues on Intangibles. Healthcare Research Services industry average Intangibles investment in the same period was 122.5%
  10. Net Margins: LabCorp Net Margins in the year 2016 were 7.6%. Healthcare Research Services industry average Net Margins in the same period were 4.6%

Sector and Industry Association of LabCorp

For the purpose of performance benchmarking of a company with a sector or industry average, R&P Research associates every company with one sector and one industry. An industry consists of companies with related/similar business models. A sector comprises of a group of related/similar industries. For high-level analysis purposes, related/similar sectors are grouped into sector groups.

LabCorp is associated with Healthcare Sector Group, Healthcare Services Sector, and Healthcare Research Services Industry.

Healthcare Services sector is comprised of the following industries: Drug Stores, PBM and Distributors; Healthcare Payers; Healthcare Providers; Medical Software; Healthcare Research Services. The definitions for each of the industries is as follows:

  • Drug Stores, PBM and Distributors industry includes nationwide drugstore chains, pharmacy benefit management (PBM) companies, and drug distributors. Drug stores also offer walk-in clinics and related pharmacy services. Distributors distribute branded and generic pharmaceutical and other healthcare products to hospitals, pharmacies and other healthcare providers. PBMs are primarily responsible for developing and maintaining the formulary, contracting with pharmacies, negotiating discounts and rebates with drug manufacturers, and processing and paying prescription drug claims.
  • Healthcare Payers industry includes healthcare insurance companies that finance or reimburse the cost of health services. These companies also offer collaborative care, population health management, healthcare technology, Pharmacy Benefit Management, analytics, consulting and administrative services.
  • Healthcare Providers industry consist primarily of hospitals but recent changes in the health services industry have contributed to both increasing numbers of other types of facility providers. Companies in this industry include traditional healthcare providers and emerging healthcare facility providers like ambulatory surgery centers, behavioral healthcare facilities, dialysis clinics, home health care companies and others.
  • Medical Software industry includes companies that offer any software item or system used within a healthcare context. These companies offer standalone software used for diagnostic, therapeutic purposes, clinical financial and operational purposes.
  • Healthcare Research Services industry includes companies that offer biopharmaceutical development services, commercial outsourcing services; commercial pharmaceutical sales and service organizations, consulting, health information analytics and technology consulting.

Industry Ranking of LabCorp

With $9.6 billion revenues, LabCorp ranked number 1 of all the companies in the US Healthcare Research Services industry. There were a total of 14 public companies in the US Healthcare Research Services industry that had revenues greater than $50 million during 2016.

The top-10 companies in the US Healthcare Research Services industry by revenues during 2016 were:

  1. LabCorp ($9.6 billion)
  2. QuintilesIMS ($6.9 billion)
  3. Parexel International ($2.4 billion)
  4. PRA Health Sciences ($1.8 billion)
  5. Charles River Laboratories International ($1.7 billion)
  6. INC Research ($1.6 billion)
  7. Radnet ($884.5 million)
  8. Albany Molecular Research ($570.5 million)
  9. Medpace Holdings ($421.6 million)
  10. NeoGenomics ($244.1 million)

Business Model Analysis (BMA) Framework

We use the following framework to assess the business model of a company. Business Model Analysis framework can be used by organizations to articulate growth strategies and identify cost optimization opportunities. Technology and consulting companies can use this framework to identify the value drivers and pain points of their targeted customers. Entrepreneurs can use this framework to understand the language of business and identify promising business opportunities. This framework can be used by any professional aspiring to take up a leadership role to better understand the businesses challenges, articulate growth strategy, and monitor the business improvement requirements for the organization.

Next Steps

  • Conduct a holistic benchmarking; to identify and target additional sources of value
  • Get in touch with us to learn more about Business Model Analysis Framework
  • Get free data, charts, and analysis of LabCorpand its peers on select key performance indicators by clicking the reports provided below

Industry Peers and Competitors of labcorp

QuintilesIMS (Q) Business Analysis – Analyze Historical Performance, Strategic Priorities, And...

Quintiles IMS Holdings, Inc. with $7 billion revenues in the year 2016 was the number 2 Healthcare Research Services company. Read this report to know the top competitors of QuintilesIMS and identify growth and cost optimization opportunities of QuintilesIMS

Parexel International (PRXL) Business Analysis – Analyze Historical Performance, Strategic Priorities,...

Parexel International Corp with $2 billion revenues in the year 2016 was the number 3 Healthcare Research Services company. Read this report to know the top competitors of Parexel International and identify growth and cost optimization opportunities of Parexel International

PRA Health Sciences (PRAH) Business Analysis – Analyze Historical Performance, Strategic...

PRA Health Sciences, Inc. with $2 billion revenues in the year 2016 was the number 4 Healthcare Research Services company. Read this report to know the top competitors of PRA Health Sciences and identify growth and cost optimization opportunities of PRA Health Sciences

Charles River Laboratories International (CRL) Business Analysis – Analyze Historical Performance,...

Charles River Laboratories International Inc with $2 billion revenues in the year 2016 was the number 5 Healthcare Research Services company. Read this report to know the top competitors of Charles River Laboratories International and identify growth and cost optimization opportunities of Charles River Laboratories International

INC Research (INCR) Business Analysis – Analyze Historical Performance, Strategic Priorities,...

INC Research Holdings, Inc. with $2 billion revenues in the year 2016 was the number 6 Healthcare Research Services company. Read this report to know the top competitors of INC Research and identify growth and cost optimization opportunities of INC Research

Radnet (RDNT) Business Analysis – Analyze Historical Performance, Strategic Priorities, And...

Radnet, Inc. with $885 million revenues in the year 2016 was the number 7 Healthcare Research Services company. Read this report to know the top competitors of Radnet and identify growth and cost optimization opportunities of Radnet

Revenues Analysis

LabCorp (LH) Revenues And Revenue Growth From 2012 To 2016

This report provides the last five years revenues and revenue growth of Laboratory Corp Of America Holdings (LH) from 2012 to 2016. LabCorp generated a total of $9.6 billion revenues during 2016. LabCorp reported a revenue growth of 11.1% year-over-year during 2016. The revenues and the revenue growth correspond to the fiscal year ending in December.

LabCorp (LH) Revenues And Revenue Growth From 2002 To 2016

This report provides the last fifteen years revenues and revenue growth of Laboratory Corp Of America Holdings (LH) from 2002 to 2016. LabCorp generated a total of $9.6 billion revenues during 2016. LabCorp reported a revenue growth of 11.1% year-over-year during 2016. The revenues and the revenue growth correspond to the fiscal year ending in December.

LabCorp (LH) Revenue Growth Comparison With Industry Growth From 2012 To...

This report provides a comparison of Laboratory Corp Of America Holdings (LH) revenue growth with Healthcare Research Services industry growth during the last five years from 2012 to 2016. LabCorp reported a revenue growth of 11.1% year-over-year during 2016. The Healthcare Research Services industry growth was 14.8% year-over-year during 2016. LabCorp growth was slower than the industry during 2016.

Profit Analysis