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Here's Why You Should Invest in IDEXX (IDXX) Stock Right Now
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IDEXX Laboratories, Inc. (IDXX - Free Report) is well-poised to grow confidence, backed by solid gains in CAG (Companion Animal Group) Diagnostics’ recurring revenues. Strong momentum in the expansion of the ProCyte One installed base buoys optimism. The expansion of its commercial footprint has been a key element of the company’s customer engagement strategy, which is highly promising.
However, IDEXX’s operations are prone to macroeconomic challenges. Also, unfavorable solvency does not bode well.
In the past year, this Zacks Rank #4 (Sell) stock has increased 2.8% against the 8.9% decline of the industry and an 11.5% rise of the S&P 500 composite.
The renowned medical device company has a market capitalization of $35.1 billion. IDEXX has an estimated long-term earnings growth rate of 18% compared with the industry’s 14.2%. IDXX’s earnings surpassed estimates in all the trailing four quarters, delivering an average surprise of 7.64%.
Let’s delve deeper.
Upsides
CAG Continues to Perform Well: The company’s long-term success in the continuing growth of CAG’s recurring diagnostic products and services depends on growing volumes at existing customers by increasing their utilization of existing and new test offerings, acquiring new customers, maintaining high customer loyalty and retention and realizing modest annual price increases.
Once again, in the third quarter of 2023, IDEXX's CAG Diagnostics recurring revenues remained solidly above sector growth levels. In the United States, volume growth was supported by new business gains, high customer retention levels and continued increases in diagnostic frequency and utilization per clinical visit at the practice level.
Image Source: Zacks Investment Research
ProCyte One, a Long-Term Growth Component: IDEXX’s innovative, customer-friendly hematology analyzer, ProCyte One, has been a key driver of strong premium hematology placements since its launch in 2021.
Additionally, ProCyte One supports the company’s long-term growth goal in international markets, where most veterinarians are qualified to perform hematology testing when determining a patient's general health. At the third quarter-end, the global installed base exceeded more than 12,000 instruments.
Strong Global Performance: IDEXX’s increased commercial presence as a result of seven international commercial expansions since 2020 helped drive solid double-digit year-over-year gains in the international premium instrument installed base across platforms in the third quarter of 2023.
Globally, IDEXX continues to achieve strong organic revenue growth across its modalities. In the third quarter, consumable gains were aided by 11% growth in the global premium instrument installed base, reflecting solid gains across its Catalyst, Premium Hematology and SediVue platforms. In addition, IDEXX’s premium instrument placements continue to benefit from the international launch of ProCyte One.
Downsides
Macroeconomic Concerns: During the third quarter, IDXX’s sales and marketing expenses rose primarily due to higher personnel-related costs, partially offset by lower meeting and conference costs. General and administrative expenses also increased 6.3%, driven by higher personnel-related and outside services costs. Headwinds from ongoing capacity management challenges at U.S. clinics impacted software trends and caused a relative slowdown in wellness visits in the quarter.
Debt Profile: At the end of the third quarter of 2023, IDEXX reported a short-term debt of $400 million against the corresponding cash and cash equivalents of $331.7 million. With unfavorable solvency, the company is likely to face a challenge in repaying its obligations.
Estimate Trend
The Zacks Consensus Estimate for IDEXX’s 2023 earnings per share (EPS) has moved down from $9.81 to $9.80 in the past 30 days and increased to $9.82 in the past seven days.
The Zacks Consensus Estimate for the company’s 2023 revenues is pegged at $3.65 billion. This suggests an 8.3% rise from the year-ago reported number.
Haemonetics has an estimated earnings growth rate of 27.1% for fiscal 2024 compared with the industry’s 17.2%. HAE’s earnings surpassed the Zacks Consensus Estimate in all the trailing four quarters, the average surprise being 19.39%. Its shares have rallied 3.8% against the industry’s 9.2% fall in the past year.
Insulet, sporting a Zacks Rank #1 at present, has a long-term estimated earnings growth rate of 41.5% compared with the industry’s 12.2%. Shares of the company have decreased 49.2% compared with the industry’s 9.2% decline over the past year.
PODD’s earnings surpassed estimates in all the trailing four quarters, the average surprise being 126.9%. In the last reported quarter, it delivered an average earnings surprise of 58.3%.
DexCom, carrying a Zacks Rank #2 at present, has an estimated long-term earnings growth rate of 33.6% compared with the industry’s 14.3%. Shares of DXCM have fallen 22.5% compared with the industry’s 8.9% decline over the past year.
DXCM’s earnings surpassed estimates in all the trailing four quarters, the average surprise being 36.4%. In the last reported quarter, it delivered an average earnings surprise of 47.1%.
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Here's Why You Should Invest in IDEXX (IDXX) Stock Right Now
IDEXX Laboratories, Inc. (IDXX - Free Report) is well-poised to grow confidence, backed by solid gains in CAG (Companion Animal Group) Diagnostics’ recurring revenues. Strong momentum in the expansion of the ProCyte One installed base buoys optimism. The expansion of its commercial footprint has been a key element of the company’s customer engagement strategy, which is highly promising.
However, IDEXX’s operations are prone to macroeconomic challenges. Also, unfavorable solvency does not bode well.
In the past year, this Zacks Rank #4 (Sell) stock has increased 2.8% against the 8.9% decline of the industry and an 11.5% rise of the S&P 500 composite.
The renowned medical device company has a market capitalization of $35.1 billion. IDEXX has an estimated long-term earnings growth rate of 18% compared with the industry’s 14.2%. IDXX’s earnings surpassed estimates in all the trailing four quarters, delivering an average surprise of 7.64%.
Let’s delve deeper.
Upsides
CAG Continues to Perform Well: The company’s long-term success in the continuing growth of CAG’s recurring diagnostic products and services depends on growing volumes at existing customers by increasing their utilization of existing and new test offerings, acquiring new customers, maintaining high customer loyalty and retention and realizing modest annual price increases.
Once again, in the third quarter of 2023, IDEXX's CAG Diagnostics recurring revenues remained solidly above sector growth levels. In the United States, volume growth was supported by new business gains, high customer retention levels and continued increases in diagnostic frequency and utilization per clinical visit at the practice level.
Image Source: Zacks Investment Research
ProCyte One, a Long-Term Growth Component: IDEXX’s innovative, customer-friendly hematology analyzer, ProCyte One, has been a key driver of strong premium hematology placements since its launch in 2021.
Additionally, ProCyte One supports the company’s long-term growth goal in international markets, where most veterinarians are qualified to perform hematology testing when determining a patient's general health. At the third quarter-end, the global installed base exceeded more than 12,000 instruments.
Strong Global Performance: IDEXX’s increased commercial presence as a result of seven international commercial expansions since 2020 helped drive solid double-digit year-over-year gains in the international premium instrument installed base across platforms in the third quarter of 2023.
Globally, IDEXX continues to achieve strong organic revenue growth across its modalities. In the third quarter, consumable gains were aided by 11% growth in the global premium instrument installed base, reflecting solid gains across its Catalyst, Premium Hematology and SediVue platforms. In addition, IDEXX’s premium instrument placements continue to benefit from the international launch of ProCyte One.
Downsides
Macroeconomic Concerns: During the third quarter, IDXX’s sales and marketing expenses rose primarily due to higher personnel-related costs, partially offset by lower meeting and conference costs. General and administrative expenses also increased 6.3%, driven by higher personnel-related and outside services costs. Headwinds from ongoing capacity management challenges at U.S. clinics impacted software trends and caused a relative slowdown in wellness visits in the quarter.
Debt Profile: At the end of the third quarter of 2023, IDEXX reported a short-term debt of $400 million against the corresponding cash and cash equivalents of $331.7 million. With unfavorable solvency, the company is likely to face a challenge in repaying its obligations.
Estimate Trend
The Zacks Consensus Estimate for IDEXX’s 2023 earnings per share (EPS) has moved down from $9.81 to $9.80 in the past 30 days and increased to $9.82 in the past seven days.
The Zacks Consensus Estimate for the company’s 2023 revenues is pegged at $3.65 billion. This suggests an 8.3% rise from the year-ago reported number.
Key Picks
Some better-ranked stocks in the broader medical space are Haemonetics (HAE - Free Report) , Insulet (PODD - Free Report) and DexCom (DXCM - Free Report) .
Haemonetics has an estimated earnings growth rate of 27.1% for fiscal 2024 compared with the industry’s 17.2%. HAE’s earnings surpassed the Zacks Consensus Estimate in all the trailing four quarters, the average surprise being 19.39%. Its shares have rallied 3.8% against the industry’s 9.2% fall in the past year.
HAE carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Insulet, sporting a Zacks Rank #1 at present, has a long-term estimated earnings growth rate of 41.5% compared with the industry’s 12.2%. Shares of the company have decreased 49.2% compared with the industry’s 9.2% decline over the past year.
PODD’s earnings surpassed estimates in all the trailing four quarters, the average surprise being 126.9%. In the last reported quarter, it delivered an average earnings surprise of 58.3%.
DexCom, carrying a Zacks Rank #2 at present, has an estimated long-term earnings growth rate of 33.6% compared with the industry’s 14.3%. Shares of DXCM have fallen 22.5% compared with the industry’s 8.9% decline over the past year.
DXCM’s earnings surpassed estimates in all the trailing four quarters, the average surprise being 36.4%. In the last reported quarter, it delivered an average earnings surprise of 47.1%.