It has been about a month since the last earnings report for Idexx Laboratories (IDXX Quick QuoteIDXX - Free Report) . Shares have added about 5% 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 Q1 Earnings Top Estimates, 2024 View Cut

IDEXX Laboratories, Inc. posted first-quarter 2024 earnings per share of $2.81, up 10.2% year over year. The figure surpassed the Zacks Consensus Estimate by 4.9%.

In the first quarter of 2024, comparable constant-currency EPS of $2.71 improved 8.8% year over year.

Revenues in Detail

First-quarter revenues increased 7.1% year over year (7% organically) to $964.1 million. However, the metric missed the Zacks Consensus Estimate by 0.1%.

The year-over-year upside was primarily driven by the 7% reported organic growth in Companion Animal Group (“CAG”) revenues.

CAG Diagnostics’ recurring revenues increased 7% on a reported basis and organic basis, supported by the sustained benefits of IDEXX execution drivers. 8% global premium instrument placement growth and continued high customer retention levels supported the 11% annual growth in IDEXX's global premium instrument installed base.

Veterinary software, services and diagnostic imaging systems’ revenues increased 12% on a reported basis and 8% organically, reflecting high recurring revenue growth and continued momentum in cloud-based software placements.

Segmental Analysis

IDEXX derives revenues from four operating segments — CAG, Water, Livestock, Poultry and Dairy (“LPD”) and Other.

In the first quarter, CAG revenues rose 7% on a reported and organic basis year over year to $889.3 million. The Water segment’s revenues increased 11% (same organically) year over year to $43.1 million.

For the first quarter, LPD revenues decreased 3% on a reported and organic basis to $28.2 million. Revenues from the Other segment fell 26.8% on a reported basis to $3.5 million.

Margins

The gross profit in the first quarter rose 9.2% to $593.1 million. The gross margin expanded 120 basis points (bps) to 61.5% despite a 3.9% rise in the cost of revenues.

Sales and marketing expenses rose 1.1% to $149 million, while G&A expenses increased 31.3% to $92 million.  R&D expenses rose 17.8% to $52.6 million. Overall, the operating profit in the reported quarter was $298.9 million, up 6.6% year over year. However, the operating margin in the quarter contracted 14 bps to 31%.

Financial Position

IDEXX exited the first quarter with cash and cash equivalents of $397.4 million compared with $453.9 million at the end of 2023. Total debt (including the current portion) was $695.8 million compared with $697.9 million at the end of 2023.

The cumulative net cash provided by operating activities was $198.6 million compared with $183.9 million in the prior-year comparable period.

2024 Guidance

IDEXX provided an updated outlook for 2024.

The company expects total revenues in the range of $3.895 billion-$3.965 billion (previously $3.930 billion-$4.040 billion). This suggests growth of 6.5%-8.5% (earlier 7.5%-10.5%) on a reported basis and 7 (earlier 7) on an organic basis. The Zacks Consensus Estimate is currently pegged at $3.99 billion.

IDEXX guided full-year EPS in the range of $10.82-$11.20 (previously $10.84-$11.33). This updated guidance indicates reported growth of 8 (earlier 8). The Zacks Consensus Estimate for full-year EPS is currently pegged at $11.13.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a downward trend in fresh estimates.

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 D on the value side, putting it in the bottom 40% 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 broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise Idexx has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.

Performance of an Industry Player

Idexx belongs to the Zacks Medical - Instruments industry. Another stock from the same industry, Edwards Lifesciences (EW Quick QuoteEW - Free Report) , has gained 3.3% over the past month. More than a month has passed since the company reported results for the quarter ended March 2024.

Edwards Lifesciences reported revenues of $1.6 billion in the last reported quarter, representing a year-over-year change of +9.5%. EPS of $0.66 for the same period compares with $0.62 a year ago.

For the current quarter, Edwards Lifesciences is expected to post earnings of $0.70 per share, indicating a change of +6.1% from the year-ago quarter. The Zacks Consensus Estimate has changed +0% over the last 30 days.

The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for Edwards Lifesciences. Also, the stock has a VGM Score of D.