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Here's Why You Should Buy IDEXX Laboratories (IDXX) Stock
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IDEXX Laboratories, Inc. (IDXX - Free Report) has been gaining investor confidence on continued positive results. Over the past year, the company’s share price has outperformed its industry. The stock has gained 18% in comparison with the industry’s 11% rise and the S&P 500’s 2.1% increase.
This leading developer, manufacturer and distributer of products and services, primarily for the companion animal veterinary, livestock and poultry, water testing and dairy markets, has a market cap of $17.91 billion. The company has an expected earnings growth rate of 18.8% for the next three to five years.
With solid prospects, this Zacks Rank #2 (Buy) stock is an attractive pick for investors at the moment.
What’s Working in Favor of the Stock?
Solid Quarterly Performance
IDEXX exited the fourth quarter on a promising note. Solid year-over year growth in organic revenues and a raised earnings guidance for 2019 are encouraging. The top line in the quarter was driven by strong sales at the CAG business. The company witnessed strong gains in CAG Diagnostics recurring revenue and global premium instrument installed base in the quarter.
Strong International Performance
IDEXX continues to demonstrate solid growth globally with strong international expansion. International revenues in the fourth quarter of 2018 were up 7.7% organically, driven by 12.5% organic gains in CAG Diagnostics recurring revenues. This reflected continued consumable revenue gains supported by reference lab growth. This apart, international Catalyst placements at newer competitive accounts increased 29% year over year in the quarter, accounting for 48% of total international Catalyst placements. Further, there was solid double-digit worldwide gain in economic value index.
CAG Continues to Perform Well
IDEXX derives the lion’s share of its revenues from its Companion Animal Group segment. In the fourth quarter, CAG revenues rose 13% organically year over year, supported by strong CAG Diagnostics recurring organic revenue growth, high premium CAG instrument placements and continued solid growth in software, services and diagnostic imaging system businesses.
The U.S. CAG Diagnostic recurring revenues increased 13.3% organically, driven by mid-teen growth in consumables and reference lab sales and solid growth in rapid assay revenues. The international CAG Diagnostic recurring revenues increased 12.5% organically in the fourth quarter driven by 20%-plus organic growth in international consumable revenues.
Other Key Picks
Other top-ranked stocks in the broader medical space include Penumbra, Inc. (PEN - Free Report) , Amedisys, Inc. (AMED - Free Report) and Abbott Laboratories (ABT - Free Report) .
Amedisys’ long-term earnings growth rate is projected at 18.8%. The stock carries a Zacks Rank #2.
Abbott’s long-term earnings growth rate is expected at 11.7%. The stock carries a Zacks Rank of 2.
Zacks' Best Stock-Picking Strategy
It's hard to believe, even for us at Zacks. But from 2000-2018, while the market gained +4.8% per year, our top stock-picking strategy averaged +54.3% per year.
How has that screen done lately? From 2017-2018, it sextupled the market's +15.8% gain with a soaring +98.3% return.
Image: Bigstock
Here's Why You Should Buy IDEXX Laboratories (IDXX) Stock
IDEXX Laboratories, Inc. (IDXX - Free Report) has been gaining investor confidence on continued positive results. Over the past year, the company’s share price has outperformed its industry. The stock has gained 18% in comparison with the industry’s 11% rise and the S&P 500’s 2.1% increase.
This leading developer, manufacturer and distributer of products and services, primarily for the companion animal veterinary, livestock and poultry, water testing and dairy markets, has a market cap of $17.91 billion. The company has an expected earnings growth rate of 18.8% for the next three to five years.
With solid prospects, this Zacks Rank #2 (Buy) stock is an attractive pick for investors at the moment.
What’s Working in Favor of the Stock?
Solid Quarterly Performance
IDEXX exited the fourth quarter on a promising note. Solid year-over year growth in organic revenues and a raised earnings guidance for 2019 are encouraging. The top line in the quarter was driven by strong sales at the CAG business. The company witnessed strong gains in CAG Diagnostics recurring revenue and global premium instrument installed base in the quarter.
Strong International Performance
IDEXX continues to demonstrate solid growth globally with strong international expansion. International revenues in the fourth quarter of 2018 were up 7.7% organically, driven by 12.5% organic gains in CAG Diagnostics recurring revenues. This reflected continued consumable revenue gains supported by reference lab growth. This apart, international Catalyst placements at newer competitive accounts increased 29% year over year in the quarter, accounting for 48% of total international Catalyst placements. Further, there was solid double-digit worldwide gain in economic value index.
CAG Continues to Perform Well
IDEXX derives the lion’s share of its revenues from its Companion Animal Group segment. In the fourth quarter, CAG revenues rose 13% organically year over year, supported by strong CAG Diagnostics recurring organic revenue growth, high premium CAG instrument placements and continued solid growth in software, services and diagnostic imaging system businesses.
The U.S. CAG Diagnostic recurring revenues increased 13.3% organically, driven by mid-teen growth in consumables and reference lab sales and solid growth in rapid assay revenues. The international CAG Diagnostic recurring revenues increased 12.5% organically in the fourth quarter driven by 20%-plus organic growth in international consumable revenues.
Other Key Picks
Other top-ranked stocks in the broader medical space include Penumbra, Inc. (PEN - Free Report) , Amedisys, Inc. (AMED - Free Report) and Abbott Laboratories (ABT - Free Report) .
Penumbra’s long-term earnings growth rate is expected at 20%. The stock carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Amedisys’ long-term earnings growth rate is projected at 18.8%. The stock carries a Zacks Rank #2.
Abbott’s long-term earnings growth rate is expected at 11.7%. The stock carries a Zacks Rank of 2.
Zacks' Best Stock-Picking Strategy
It's hard to believe, even for us at Zacks. But from 2000-2018, while the market gained +4.8% per year, our top stock-picking strategy averaged +54.3% per year.
How has that screen done lately? From 2017-2018, it sextupled the market's +15.8% gain with a soaring +98.3% return.
Free – See the Stocks It Turned Up for Today >>