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Masimo Corporation (MASI) - free report >>
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IDEXX: International Growth Strong, Currency Woes Persist
On Jul 1, we issued an updated research report on Delaware, NJ-based IDEXX Laboratories, Inc. (IDXX - Free Report) – a manufacturer and distributor of products and services primarily for the companion animal veterinary, livestock and poultry, water testing and dairy markets. The company currently carries a Zacks Rank #2 (Buy).
IDEXX continued to demonstrate solid growth globally with strong international expansion, as is evident from the double-digit organic revenue growth observed overseas in first-quarter 2016. During the quarter, the company successfully placed 714 catalysts and 1,150 premium instruments in its international market.
Strong consumable revenue growth owing to high levels of instrument placements as well as improved lab revenue gains primarily drove the overseas growth. Management was particularly upbeat about the continued growth observed in premium instrument placements.
With respect to its Companion Animal Group (“CAG”) segment, IDEXX witnessed strong recurring Diagnostic gains across the U.S., Canada, Europe, Asia Pacific and Latin America. The company also holds a strong cash balance position.
On the flip side, foreign currency headwinds are a major concern, with approximately 38% of IDEXX’s sales coming from overseas. Evidently, foreign exchange fluctuations affected the company’s revenue growth in the first quarter by 2% and EPS by 5 cents per share, including the impact from the 2015 hedge gains.
Moreover, the instrument consumables and rapid assay products in the company’s CAG segment are often sold by third-party distributors. Unfavorable distributor purchasing dynamics can affect IDEXX’s sales growth for these products. Competitive headwinds also pose a threat to the stock.
Key Picks in the Sector
Other well-ranked medical stocks are CryoLife Inc. , Masimo Corporation (MASI - Free Report) and Mesa Laboratories Inc. (MLAB - Free Report) . All the three stocks sport a Zacks Rank #1 (Strong Buy).
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