Why are the laboratory and diagnostic testing stocks so sharply down in recent months?

In the last few months, some of the popular testing and diagnostic labs like Dr. *** Pathlabs, Metropolis Healthcare and Krsnaa Diagnostics have lost over 40% from their recent peaks. The same laboratory and diagnostic stocks that virtually ruled the roost during the COVID period, are now looking for new sources of growth to fuel investor interest. Most of these stocks that rallied on COVID-fuelled hopes, have badly faltered in recent months.

The reasons are not far to seek. As outbreaks ease and countries look to reopen operations, these advantages have started to fade for the clinical labs. Major players like Metropolis Healthcare, Krsnaa Diagnostics and Dr *** PathLabs missed analyst estimates by a fair margin. It is feared that many of these companies may face additional stress arising from expensive mergers and acquisition deals executed at the peak of the cycle.