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Why Is Idexx (IDXX) Up 3.3% Since Last Earnings Report?
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A month has gone by since the last earnings report for Idexx Laboratories (IDXX - Free Report) . Shares have added about 3.3% 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 the most recent earnings report in order to get a better handle on the important catalysts.
IDEXX Earnings Beat Estimates in Q1, '21 View Up
IDEXX posted first-quarter 2021 earnings per share of $2.35, reflecting an 82.2% year-over-year rise. The figure surpassed the Zacks Consensus Estimate by 36.6%.
Comparable-constant-currency earnings per share growth was 73%, which excludes tax benefits from share-based compensation of 17 cents per share.
Revenues in Detail
First-quarter revenues grew 24.2% year over year to $777.7 million. Organically, growth was 21%. The metric exceeded the Zacks Consensus Estimate by 5.9%.
The year-over-year upside was primarily driven by 26.5% reported and 23.3% organic growth in global CAG Diagnostics’ recurring revenues and 31% reported and 27% organic growth in CAG Diagnostics capital instrument revenues. Sustained strong growth in the LPD business also drove the top line. OPTI Medical Systems’ COVID-19 human PCR testing contributed about 1% to the first-quarter top line.
However, first-quarter results were impacted by a fall in diagnostic imaging systems revenues and soft revenues from the Water business impacted by factors related to the COVID-19 pandemic.
Segmental Analysis
IDEXX derives revenues from four operating segments — CAG, Water, LPD and Other.
In the first quarter, CAG revenues rose 25.5% (up 22.4% organically) year over year to $692.8 million. The Water segment’s revenues were down 0.3% (down 2.6% organically) year over year to $34 million. LPD revenues rose 15% (up 9.3% organically) to $39.3 million. Revenues at the Other segment grew 92.7% on reported and organic basis to $11.6 million.
Margins
Gross profit in the first quarter rose 30.9% to $470.8 million. Gross margin expanded 312 basis points (bps) to 60.5% despite a 15.1% rise in cost of revenues to $306.9 million.
Sales and marketing expenses fell 1.1% to $114.8 million, while general and administrative expenses moved up 7.5% to $70.8 million. Research and development expenses climbed 12.8% to $37.6 million.
Operating profit in the reported quarter was $247.6 million, reflecting an improvement of 71.6% year over year. Operating margin in the quarter expanded 880 bps to 31.8%.
Financial Position
IDEXX exited the first quarter of 2021 with cash and cash equivalents of $351.2 million compared with $383.9 million recorded at the end of 2020. Total debt (including current portion) for the company at the end of first quarter of 2021 was $903.7 million compared with total debt of $908.5 million at the end of 2020.
Net cash provided by operating activities at the end of the first quarter of 2021 was $124.4 million compared with $27.9 million a year ago.
2021 Outlook
IDEXX, boosted by the ongoing business recovery and strong performances in the reported quarter, has upped its previously-issued financial outlook for 2021.
The company projects revenues for the year to be in the range of $3,105 million- $3,160 million, reflecting growth of 14.5-16.5% and 13-15% on a reported and on an organic basis, respectively. This is significantly up from the previously provided financial outlook where revenue growth was projected to be $3,065 million-$3,120million, reflecting growth of 13-15.5% and 11.5-13.5% on a reported and on an organic basis, respectively. The Zacks Consensus Estimate for the same is currently pegged at $3.09 billion.
CAG Diagnostics’ recurring revenues for 2021 are expected to reflect growth of 16-17.5% on a reported basis and 14.5-16% on an organic basis (up from the previously issued guidance of 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 $7.88-$8.18, reflecting growth of 17-22% on a reported basis (up from the previously-issued outlook of $7.39-$7.71, reflecting a reported growth of 10-14%). The comparable constant currency growth is expected in the range of 21-26%, up from the previous range of 15-20%. The Zacks Consensus Estimate for the full-year earnings per share is currently pegged at $7.55.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates revision.
VGM Scores
At this time, Idexx has an average Growth Score of C, however its Momentum Score is doing a lot better with an A. However, the stock was allocated a grade of F on the value side, putting it in the bottom 20% quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions looks promising. Notably, Idexx has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.
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Why Is Idexx (IDXX) Up 3.3% Since Last Earnings Report?
A month has gone by since the last earnings report for Idexx Laboratories (IDXX - Free Report) . Shares have added about 3.3% 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 the most recent earnings report in order to get a better handle on the important catalysts.
IDEXX Earnings Beat Estimates in Q1, '21 View Up
IDEXX posted first-quarter 2021 earnings per share of $2.35, reflecting an 82.2% year-over-year rise. The figure surpassed the Zacks Consensus Estimate by 36.6%.
Comparable-constant-currency earnings per share growth was 73%, which excludes tax benefits from share-based compensation of 17 cents per share.
Revenues in Detail
First-quarter revenues grew 24.2% year over year to $777.7 million. Organically, growth was 21%. The metric exceeded the Zacks Consensus Estimate by 5.9%.
The year-over-year upside was primarily driven by 26.5% reported and 23.3% organic growth in global CAG Diagnostics’ recurring revenues and 31% reported and 27% organic growth in CAG Diagnostics capital instrument revenues. Sustained strong growth in the LPD business also drove the top line. OPTI Medical Systems’ COVID-19 human PCR testing contributed about 1% to the first-quarter top line.
However, first-quarter results were impacted by a fall in diagnostic imaging systems revenues and soft revenues from the Water business impacted by factors related to the COVID-19 pandemic.
Segmental Analysis
IDEXX derives revenues from four operating segments — CAG, Water, LPD and Other.
In the first quarter, CAG revenues rose 25.5% (up 22.4% organically) year over year to $692.8 million. The Water segment’s revenues were down 0.3% (down 2.6% organically) year over year to $34 million. LPD revenues rose 15% (up 9.3% organically) to $39.3 million. Revenues at the Other segment grew 92.7% on reported and organic basis to $11.6 million.
Margins
Gross profit in the first quarter rose 30.9% to $470.8 million. Gross margin expanded 312 basis points (bps) to 60.5% despite a 15.1% rise in cost of revenues to $306.9 million.
Sales and marketing expenses fell 1.1% to $114.8 million, while general and administrative expenses moved up 7.5% to $70.8 million. Research and development expenses climbed 12.8% to $37.6 million.
Operating profit in the reported quarter was $247.6 million, reflecting an improvement of 71.6% year over year. Operating margin in the quarter expanded 880 bps to 31.8%.
Financial Position
IDEXX exited the first quarter of 2021 with cash and cash equivalents of $351.2 million compared with $383.9 million recorded at the end of 2020. Total debt (including current portion) for the company at the end of first quarter of 2021 was $903.7 million compared with total debt of $908.5 million at the end of 2020.
Net cash provided by operating activities at the end of the first quarter of 2021 was $124.4 million compared with $27.9 million a year ago.
2021 Outlook
IDEXX, boosted by the ongoing business recovery and strong performances in the reported quarter, has upped its previously-issued financial outlook for 2021.
The company projects revenues for the year to be in the range of $3,105 million- $3,160 million, reflecting growth of 14.5-16.5% and 13-15% on a reported and on an organic basis, respectively. This is significantly up from the previously provided financial outlook where revenue growth was projected to be $3,065 million-$3,120million, reflecting growth of 13-15.5% and 11.5-13.5% on a reported and on an organic basis, respectively. The Zacks Consensus Estimate for the same is currently pegged at $3.09 billion.
CAG Diagnostics’ recurring revenues for 2021 are expected to reflect growth of 16-17.5% on a reported basis and 14.5-16% on an organic basis (up from the previously issued guidance of 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 $7.88-$8.18, reflecting growth of 17-22% on a reported basis (up from the previously-issued outlook of $7.39-$7.71, reflecting a reported growth of 10-14%). The comparable constant currency growth is expected in the range of 21-26%, up from the previous range of 15-20%. The Zacks Consensus Estimate for the full-year earnings per share is currently pegged at $7.55.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates revision.
VGM Scores
At this time, Idexx has an average Growth Score of C, however its Momentum Score is doing a lot better with an A. However, the stock was allocated a grade of F on the value side, putting it in the bottom 20% quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions looks promising. Notably, Idexx has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.