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Here's Why You Should Add IDEXX (IDXX) to Your Portfolio Now
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IDEXX Laboratories, Inc. (IDXX - Free Report) has been gaining on strength in the Companion Animal Group (CAG) business supported by sustained strong global trends in pet healthcare. The company’s better-than expected results in the first quarter of 2021 and raised 2021 outlook buoys optimism. However, weak capital structure and foreign exchange fluctuation remain concerns.
Over the past year, shares of this Zacks Rank #2 (Buy) company have outperformed the industry. Shares of the company have surged 91.6% compared with 19.2% growth of the industry and 40.7% 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 $50.52 billion. The company projects 19.6% growth for the next five years. The company surpassed estimates in the trailing four quarters, the average surprise being 34.88%.
Let’s delve deeper.
Factors at Play
Continued CAG Growth: IDEXX is raising optimism over the stock by deriving the lion’s share of revenues from the CAG segment. The company registered stellar first-quarter revenue growth within CAG.
In the first quarter, CAG revenues rose 25.5% year over year, driven by 26.5% reported and 23.3% organic growth in global CAG Diagnostics recurring revenues. This uptick in overall CAG revenues reflects 19% organic growth in the United States and 29.2% organic growth in international markets. IDEXX also witnessed a significant improvement in CAG instrument placements during the first quarter.
Strong Global Performance: We are optimistic about IDEXX demonstrating solid growth globally. International revenues in the first quarter of 2021 were up 24.2% organically, aided by a 23.3% rise in CAG Diagnostics recurring revenues. Global Reference Lab revenues increased 22% organically, reflecting more than 20% organic growth in the United States and international markets.
Raised Guidance: We are upbeat about IDEXX on its raised 2021 financial outlook.
The company projects revenues for the year in the range of $3,105-$3,160 million, indicating growth of 14.5-16.5% on a reported basis. CAG Diagnostics’ recurring revenues for 2021 are expected to grow 16-17.5% on a reported basis. Further, IDEXX projects full-year earnings per share in the range of $7.88-$8.18, suggesting growth of 17-22% on a reported basis.
However, downsides might result from IDEXX deriving majority of consolidated revenues from sale of products in international markets. Thus, the strengthening of the rate of exchange for the U.S. dollar relative to other currencies had a negative impact on 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 $908.5 million for the fourth quarter, reflecting a noticeable increase from $903.7 million in the preceding quarter. This figure, however, was much higher than the year-end cash and cash equivalent of $351.2 million.
Estimate Trends
IDEXX has been witnessing a positive estimate revision trend for the current year. Over the past 60 days, the Zacks Consensus Estimate for its earnings has moved 5.7% north to $7.98.
The Zacks Consensus Estimate for its second-quarter 2021 revenues is pegged at $737.9 million, suggesting 15.7% growth from the year-ago reported number.
Envista Holdings has an estimated long-term earnings growth rate of 26%.
Inogen has an estimated long-term earnings growth rate of 33%.
Phibro Animal Health has an estimated long-term earnings growth rate of 11%.
Zacks Names “Single Best Pick to Double”
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
You know this company from its past glory days, but few would expect that it’s poised for a monster turnaround. Fresh from a successful repositioning and flush with A-list celeb endorsements, it could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in a little more than 9 months and Nvidia which boomed +175.9% in one year.
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Here's Why You Should Add IDEXX (IDXX) to Your Portfolio Now
IDEXX Laboratories, Inc. (IDXX - Free Report) has been gaining on strength in the Companion Animal Group (CAG) business supported by sustained strong global trends in pet healthcare. The company’s better-than expected results in the first quarter of 2021 and raised 2021 outlook buoys optimism. However, weak capital structure and foreign exchange fluctuation remain concerns.
Over the past year, shares of this Zacks Rank #2 (Buy) company have outperformed the industry. Shares of the company have surged 91.6% compared with 19.2% growth of the industry and 40.7% 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 $50.52 billion. The company projects 19.6% growth for the next five years. The company surpassed estimates in the trailing four quarters, the average surprise being 34.88%.
Let’s delve deeper.
Factors at Play
Continued CAG Growth: IDEXX is raising optimism over the stock by deriving the lion’s share of revenues from the CAG segment. The company registered stellar first-quarter revenue growth within CAG.
In the first quarter, CAG revenues rose 25.5% year over year, driven by 26.5% reported and 23.3% organic growth in global CAG Diagnostics recurring revenues. This uptick in overall CAG revenues reflects 19% organic growth in the United States and 29.2% organic growth in international markets. IDEXX also witnessed a significant improvement in CAG instrument placements during the first quarter.
Strong Global Performance: We are optimistic about IDEXX demonstrating solid growth globally. International revenues in the first quarter of 2021 were up 24.2% organically, aided by a 23.3% rise in CAG Diagnostics recurring revenues. Global Reference Lab revenues increased 22% organically, reflecting more than 20% organic growth in the United States and international markets.
Raised Guidance: We are upbeat about IDEXX on its raised 2021 financial outlook.
The company projects revenues for the year in the range of $3,105-$3,160 million, indicating growth of 14.5-16.5% on a reported basis. CAG Diagnostics’ recurring revenues for 2021 are expected to grow 16-17.5% on a reported basis. Further, IDEXX projects full-year earnings per share in the range of $7.88-$8.18, suggesting growth of 17-22% on a reported basis.
However, downsides might result from IDEXX deriving majority of consolidated revenues from sale of products in international markets. Thus, the strengthening of the rate of exchange for the U.S. dollar relative to other currencies had a negative impact on 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 $908.5 million for the fourth quarter, reflecting a noticeable increase from $903.7 million in the preceding quarter. This figure, however, was much higher than the year-end cash and cash equivalent of $351.2 million.
Estimate Trends
IDEXX has been witnessing a positive estimate revision trend for the current year. Over the past 60 days, the Zacks Consensus Estimate for its earnings has moved 5.7% north to $7.98.
The Zacks Consensus Estimate for its second-quarter 2021 revenues is pegged at $737.9 million, suggesting 15.7% growth from the year-ago reported number.
Key Picks
A few similar-ranked stocks from the broader medical space are Envista Holdings Corporation (NVST - Free Report) , Inogen, Inc (INGN - Free Report) and Phibro Animal Health Corporation (PAHC - 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%.
Inogen has an estimated long-term earnings growth rate of 33%.
Phibro Animal Health has an estimated long-term earnings growth rate of 11%.
Zacks Names “Single Best Pick to Double”
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
You know this company from its past glory days, but few would expect that it’s poised for a monster turnaround. Fresh from a successful repositioning and flush with A-list celeb endorsements, it could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in a little more than 9 months and Nvidia which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>