Category: IDXX

IDXX – Here's Why You Should Add IDEXX (IDXX) to Your Portfolio Now

IDEXX Laboratories, Inc. (IDXX Free Report) has been gaining on solid top-line growth in the second quarter driven by strong sales at the CAG, LPD and Water businesses. Sturdy gains in CAG Diagnostics’ recurring revenues, supported by sustained strong global trends in pet healthcare, buoy optimism. However, a weak capital structure and foreign exchange fluctuation remain concerns.

Over the past six months, shares of this Zacks Rank #2 (Buy) company have outperformed the industry. Shares of the company have surged 26.9% compared with 8.5% growth of the industry and 13.9% rise of the S&P 500.

The renowned manufacturer of products and services, primarily for the companion animal veterinary, livestock and poultry, has a market cap of $57.99 billion. The company projects 19.9% growth for the next five years. The company surpassed estimates in the trailing four quarters, the average surprise being 28.16%.

Let’s delve deeper.

Factors at Play

Impressive Q2 Results: IDEXX exited the second quarter of 2021, with better-than-expected results. Solid organic-revenue growth is encouraging as well. The top line in the quarter was driven by strong sales at the CAG, LPD and Water businesses. The company witnessed sturdy gains in CAG Diagnostics’ recurring revenues, supported by sustained strong global trends in pet healthcare in the quarter under review.

The company’s performance in major geographies is also encouraging. Further, veterinary software, services and diagnostic imaging system revenues grew in the reported quarter on double-digit growth in subscription-based service revenues and strong growth in new veterinary software system placements and recurring software services. The acquisition of ezyVet also contributed to growth. The raised 2021 outlook is encouraging as well.

CAG Continues to Perform Well: IDEXX derives the lion’s share of its revenues from the CAG segment. The company registered stellar second-quarter revenue growth within CAG.

In the second quarter, CAG revenues rose 32% (up 27% organically) year over year, driven by 30% reported and 26% organic growth in global CAG Diagnostics recurring revenues. This uptick in overall CAG revenues reflects 24% organic growth in the United States and 30% organic growth in international markets. Continued strength in clinical visits and related diagnostic products and services in the reported quarter aided CAG Diagnostics’ recurring revenues.

Zacks Investment ResearchImage Source: Zacks Investment Research

Raised Guidance: IDEXX, boosted by the ongoing business recovery and strong quarterly performance, has raised its financial outlook for 2021. The company projects revenues for the year in the range of $3,170-$3, 205 million, suggesting year-over-year growth of 17-18.5% on a reported and 14.5-16% on an organic basis. This is significantly up from the previously-provided financial outlook where revenue growth was projected at $3,105-$3,160 million.

Further, IDEXX projects full-year earnings per share in the range of $8.20-$8.36, indicating growth of 22-25% on a reported basis (up from the earlier outlook of $7.88-$8.18).

However, IDEXX derives a majority of its consolidated revenues from the sale of products in international markets. Thus, the strengthening of the rate of exchange for the U.S. dollar relative to other currencies dented the company’s revenues derived in currencies other than the U.S. dollar.

IDEXX’s weak solvency and capital structure are concerning as well. The company’s total debt was $905.1 million for the second quarter, reflecting a marginal increase from $903.7 million in the preceding quarter. This figure, however, was much higher than the year-end cash and cash equivalent of $232.1 million.

Estimate Trends

IDEXX has been witnessing a positive estimate revision trend for the current year. Over the past 90 days, the Zacks Consensus Estimate for its earnings has moved 4.6% north to $8.35.

The Zacks Consensus Estimate for its third-quarter 2021 revenues is pegged at $793.3 million, suggesting 9.9% growth from the year-ago reported number.

Other Key Picks

A few other top-ranked stocks from the broader medical space are Envista Holdings Corp. (NVST Free Report) , BellRing Brands, Inc. (BRBR Free Report) and Henry Schein, Inc. (HSIC Free Report) , each carrying a Zacks Rank #2. You can see the complete list of Zacks #1 Rank (Strong Buy) stocks here.

Envista Holdings has an estimated long-term earnings growth rate of 26%.

BellRing Brands has an estimated long-term earnings growth rate of 22%.

Henry Schein has a projected long-term earnings growth rate of 14%.

IDXX – Idexx Laboratories (IDXX) Gains As Market Dips: What You Should Know

In the latest trading session, Idexx Laboratories (IDXX Free Report) closed at $560.35, marking a +0.36% move from the previous day. The stock outpaced the S&P 500’s daily loss of 0.08%.

Heading into today, shares of the Animal diagnostic and health care company had gained 2.59% over the past month, outpacing the Medical sector’s gain of 0.58% and the S&P 500’s gain of 1.68% in that time.

IDXX will be looking to display strength as it nears its next earnings release. In that report, analysts expect IDXX to post earnings of $1.99 per share. This would mark year-over-year growth of 15.7%. Meanwhile, our latest consensus estimate is calling for revenue of $737.87 million, up 15.73% from the prior-year quarter.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $7.98 per share and revenue of $3.01 billion. These totals would mark changes of +18.93% and +11.21%, respectively, from last year.

Investors should also note any recent changes to analyst estimates for IDXX. These revisions help to show the ever-changing nature of near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company’s business and profitability.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection remained stagnant. IDXX currently has a Zacks Rank of #2 (Buy).

Digging into valuation, IDXX currently has a Forward P/E ratio of 69.97. This represents a premium compared to its industry’s average Forward P/E of 39.96.

It is also worth noting that IDXX currently has a PEG ratio of 3.57. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company’s expected earnings growth rate. The Medical – Instruments was holding an average PEG ratio of 3.2 at yesterday’s closing price.

The Medical – Instruments industry is part of the Medical sector. This group has a Zacks Industry Rank of 199, putting it in the bottom 22% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.

IDXX – Why Is Idexx (IDXX) Up 2.6% Since Last Earnings Report?

It has been about a month since the last earnings report for Idexx Laboratories (IDXX Free Report) . Shares have added about 2.6% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Idexx due for a pullback? Before we dive into how investors and analysts have reacted as of late, let’s take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.

IDEXX Earnings Beat Estimates in Q4, Margins Rise

IDEXX posted fourth-quarter 2020 earnings per share of $2.01, reflecting a 93.3% year-over-year rise. The figure surpassed the Zacks Consensus Estimate by 40.6%.

Comparable-constant-currency earnings per share growth was 43.4%, which excludes an impact of 25 cents per share from the enactment of tax reform in Switzerland and tax benefits from share-based compensation of 13 cents per share.

Full-year adjusted earnings per share was $6.71, reflecting a 37.2% increase from the year-ago period. Again, the metric surpassed the Zacks Consensus Estimate by 9.5%.

Revenues in Detail

Fourth-quarter revenues grew 19.1% year over year to $720.9 million. Organically, growth was 17.2%. The metric exceeded the Zacks Consensus Estimate by 5.8%.

The year-over-year upside was primarily driven by 23% reported and 21% organic growth in global CAG Diagnostics’ recurring revenue. Sustained strong growth in the LPD business also drove the top line. OPTI Medical Systems’ COVID-19 human PCR testing contributed about 1.5% to the fourth-quarter top line.

However, fourth-quarter results were impacted by a fall in new CAG instrument placement levels and Water business revenues, including pressure on non-compliance water testing, impacted by factors related to the COVID-19 pandemic.

Full-year revenues were $2.71 billion, reflecting a 12.5% increase from the year-ago period. Organically, growth was 12%. Revenues surpassed the Zacks Consensus Estimate by 1.5%.

Segmental Analysis

IDEXX derives revenues from four operating segments — CAG, Water, LPD and Other.

In the fourth quarter, CAG revenues rose 18.9% (up 17% organically) year over year to $629.7 million. The Water segment’s revenues were up 0.7% (up 0.4% organically) year over year to $33.1 million. LPD revenues rose 15.9% (up 12.7% organically) to $42.5 million. Revenues at the Other segment grew 156.2% on reported and organic basis to $15.7 million.

Margins

Gross profit in the fourth quarter rose 23.7% to $409.5 million. Gross margin expanded 211 basis points (bps) to 56.8% despite a 13.5% rise in cost of revenues to $311.4 million.

Sales and marketing expenses rose 9.7% to $115.9 million, while general and administrative expenses moved down 6.6% to $69.7 million. Research and development expenses climbed 10.3% to $38.8 million.

Operating profit in the reported quarter was $185.1 million, reflecting an improvement of 60.1% year over year. Operating margin in the quarter expanded 658 bps to 25.7%.

Financial Position

IDEXX exited 2020 with cash and cash equivalents of $383.9 million compared with $90.3 million recorded at the end of 2019. Total debt (including current portion) for the company at the end of 2020 was $908.5 million compared with total debt of $698.9 million at the end of 2019.

Cumulative net cash provided by operating activities at the end of the year was $648.1 million compared with $459.2 million a year ago.

2021 Outlook

IDEXX, boosted by the ongoing business recovery and strong performances in the reported quarter, has provided the initial financial outlook for 2021.

The company projects the revenues for the year to be in the range of $3.07-$3.12 billion, reflecting growth of 13-15.5% on a reported basis. Organic growth is expected in the range of 11.5-13.5%. The Zacks Consensus Estimate for the same is currently pegged at $2.98 billion.

The CAG Diagnostics recurring revenues for 2021 are expected to reflect a growth of 13.5-16% on a reported basis and 12-14.5% on an organic basis.

Further, IDEXX projects full-year earnings per share to be in the range of $7.39-$7.71, reflecting growth of 10-14% on a reported basis. The comparable constant currency growth is expected in the range of 15-20%. The Zacks Consensus Estimate for the same is currently pegged at $6.91.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed an upward trend in estimates revision. The consensus estimate has shifted 10.22% due to these changes.

VGM Scores

At this time, Idexx has a great Growth Score of A, though it is lagging a bit on the Momentum Score front with a B. However, the stock was allocated a grade of F on the value side, putting it in the fifth quintile for this investment strategy.

Overall, the stock has an aggregate VGM Score of B. If you aren’t focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Idexx has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.

IDXX – Why This Under-the-Radar Growth Stock Will Be the Top Dog in 2021

When it comes to pet healthcare, Idexx Laboratories (NASDAQ:IDXX) is arguably the best in show. As a leading veterinary diagnostics firm, Idexx provides instruments (testing equipment) and consumables (diagnostic tests) that veterinarians need to run their practices and easily perform diagnostic tests. Essentially, Idexx Labs offers an all-in-one suite of products that handle everything from workflow management to blood and chemistry analyzers, even offering outside reference labs for smaller practices that wish to get accurate and timely results in two days or less.

2020 was a challenging year for most companies, but Idexx proved that it was an animal of a different breed. While the company took a hit earlier in the year, it managed to stabilize its revenue and even grow toward the back end of the year. Based on strong fundamental industry trends and tailwinds, there is a good chance that 2021 could be even better.

A girl kissing her dog on the face

Image source: Getty Images.

The impact of COVID-19

Idexx Labs makes money when pet owners visit their veterinarians and run diagnostic tests. So, it’s no surprise that the COVID-19 pandemic had an immediate impact on Idexx’s business, as it did for most other businesses that require customers to leave their homes.

When Idexx Labs reported its second-quarter 2020 results, it noted sharp revenue declines in April 2020 followed by a quick recovery in May and June. As it turns out, people were initially too frightened to take their pets in for treatment. But after a few weeks, veterinarians came up with solutions such as curbside pet drop-off that made the visits safer.

With more people working from home, many opted to adopt new pets to keep company. Also, existing pet owners spent more time with their furry friends which led many to notice that their pets needed to see their vets for treatment. These factors unexpectedly led to increased demand for veterinary services, boosting Idexx’s business.

Idexx Lab’s strong 2020 earnings

As it turns out, the pandemic didn’t derail Idexx’s business. In fact, it may have helped in some ways. Total revenue increased and margin improvements led to earnings growing even faster than sales.

Metric 2020 2019 YoY Growth
Total revenue $2.7 million $2.4 million 12.5%
Operating income $695 million $553 million 25.7%
Net income $582 million $428 million 36.1%
Earnings per share  $6.7 $4.8 37.2%

Data source: Idexx Labs financial statements. YoY = year over year. Table by Author.

This stellar performance was primarily driven by the company’s diagnostics segment, which grew 22.9% due to increased clinic visits and an uptick in the utilization of diagnostic tests per visit. Idexx Labs’ diagnostics revenue is recurring in nature, because veterinarians have to make annual payments to keep using the equipment. This makes its sales more predictable.

On the negative side, Idexx Labs sold fewer units of its newer testing equipment because it couldn’t get its salesforce out into the field. However, fewer equipment unit sales didn’t do much to dent the company’s revenue growth or profitability.

Overall, Idexx performed very well in 2020 thanks to favorable trends in pet adoption and demand for veterinary services. It is somewhat surprising — but the company ended up turning 2020 into a record year for revenue and earnings.

The outlook for 2021

Idexx Labs is expected to lead the pack once again with a strong 2021. Top-line revenue growth is expected to grow by double digits, led by even higher growth in diagnostics recurring revenue. The company expects continued growth in the overall number of veterinary visits and continued growth in the number of diagnostic tests run by veterinarians, according to its Q4 2020 earnings call.

Another thing to look forward to is the launch of Procyte One, Idexx’s new best-in-class hematology analyzer — a machine that analyzes blood samples. It is expected to be a blockbuster hit, with preorders and reviews already surpassing expectations. Idexx Labs has priced the machine attractively to encourage greater adoption and hopes to generate revenue from the number of tests that can be performed. The company expects to sell over 100,000 Procyte One units.

Things are looking fairly bright for the top line, but Idexx Labs is targeting more moderate improvement on the bottom line. The company expects as much as 100 basis points of margin improvement, which is below the margin improvement experienced in 2020.

All in all, the company’s growth outlook for 2021 is encouraging on both the top and the bottom lines, and gives investors plenty to look forward to.

A long-term winner

While 2020 was undoubtedly a great year for Idexx Labs, the company has been a strong performer for a long time. This is another case in which a winner has continued to win.

IDXX Chart

IDXX data by YCharts

Idexx has done a good job in North America and still has plenty of untapped growth potential domestically, but especially outside of the U.S. The company is poised to continue its leadership in the pet diagnostics testing market, which continues to grow as people around the world adopt more pets and spend more money taking care of their furry friends. All of those elements are setting Idexx (and its lucky investors) up for an exciting future.

IDXX – Is IDEXX Laboratories (IDXX) Outperforming Other Medical Stocks This Year?

For those looking to find strong Medical stocks, it is prudent to search for companies in the group that are outperforming their peers. Has IDEXX Laboratories (IDXX Free Report) been one of those stocks this year? Let’s take a closer look at the stock’s year-to-date performance to find out.

IDEXX Laboratories is one of 931 companies in the Medical group. The Medical group currently sits at #13 within the Zacks Sector Rank. The Zacks Sector Rank considers 16 different groups, measuring the average Zacks Rank of the individual stocks within the sector to gauge the strength of each group.

The Zacks Rank is a proven system that emphasizes earnings estimates and estimate revisions, highlighting a variety of stocks that are displaying the right characteristics to beat the market over the next one to three months. IDXX is currently sporting a Zacks Rank of #2 (Buy).

The Zacks Consensus Estimate for IDXX’s full-year earnings has moved 6.35% higher within the past quarter. This is a sign of improving analyst sentiment and a positive earnings outlook trend.

Based on the latest available data, IDXX has gained about 70.07% so far this year. At the same time, Medical stocks have lost an average of 3.18%. This shows that IDEXX Laboratories is outperforming its peers so far this year.

Looking more specifically, IDXX belongs to the Medical – Instruments industry, a group that includes 95 individual stocks and currently sits at #178 in the Zacks Industry Rank. On average, stocks in this group have gained 14.81% this year, meaning that IDXX is performing better in terms of year-to-date returns.

Investors with an interest in Medical stocks should continue to track IDXX. The stock will be looking to continue its solid performance.