Idexx's Upcoming New InVue Platform Launch Should Support Growth Into the Long Term

Senior Equity Analyst

Debbie Wang

Revenue segments as reported by the company.

Water

Other

Revenue Segments

Gross Profit, Operating Income, and Net Income as a percentage of Revenue

Gross Margin

Operating Margin

Profit Margin

Margins

An operating expense is an expense a business incurs through its normal business operations. Often abbreviated as OPEX.

Sales and marketing

General and administrative

Research and development

Operating Expenses

Year over year growth in Revenue and Operating Expenses.

Revenue Y/Y

OpEx Y/Y

Growth

Shares outstanding refer to a company's stock currently held by all its shareholders, including share blocks held by institutional investors and restricted shares owned by the company's officers and insiders.

Outstanding Shares

Market Cap

Also known as Price/Sales Ratio. Calculated using Average market cap for the quarter / Annualized quarterly revenue.

Revenue Multiple

Idexx Laboratories has steadily increased its scale and reach in the veterinary diagnostic lab business to dig a narrow moat. It is well-positioned to benefit from two key trends. First, pet ownership continues to grow, offering a secular tailwind since the late 1980s. Moreover, pet owners have demonstrated greater willingness to spend more on their animals, having more than tripled spending on pet products and services since 1994.

Idexx offers an impressively wide range of companion animal diagnostic tests delivered in many forms. For example, it has carved out a leadership position in single-use test kits for in-office use. These premium-priced, high-margin products offer the convenience of results in less than 10 minutes. Idexx also maintains a strong position in off-site reference lab testing, another area that has historically seen double-digit growth. Finally, Idexx enjoys the leadership position in in-hospital analyzers. Its focus on developing and broadening its menu of tests makes Idexx more of a one-stop shop for animal hospitals. Idexx is uniquely able to cross-sell many products and services, and it has developed a strong sales organization to provide tailored solutions. The firm is now aiming to replicate its U.S. success in other developed markets.

Idexx's ability to sniff out opportunities to build a better mousetrap crosses over to its smaller water-testing and production-animal-testing businesses. Municipalities are often required to routinely test water supplies; Idexx offers a unique test that can detect two of the most common bacterial contaminants and is easier and faster to use than traditional testing methods. This has allowed the firm to capture more than 60% of the water market. Idexx is also a leader in livestock and poultry diagnostics, which includes tests for foot-and-mouth disease. Although these segments haven't seen growth as consistent as that of the pet business, they generally offer fatter margins and we anticipate many years of growth ahead as rising incomes in emerging markets feed an appetite for animal protein. We like the innovation Idexx has demonstrated, and we expect there is more to come.

Business Strategy & Outlook

Idexx is the leader in point-of-care diagnostic tests and in-house analyzer equipment, and holds a well-established position in the reference lab duopoly with VCA (now part of privately held Mars). Idexx's economic moat is driven by several sources. First, the firm relies on intangible assets, including technical know-how and some intellectual property in its diagnostic tests. Idexx's key competitive advantage is its ability to consistently innovate in diagnostic tests. The firm has come up with new generations of assays and laboratory equipment that can test for more diseases and apply emerging diagnostic technology previously invented for humans to production animals and water testing, as well as companion animals. Idexx's products and services typically focus on testing for new types of diseases and parasites, improving turnaround time on test results, increasing the accuracy of results, and enhancing convenience of on-site testing. The firm also offers an integrated vet practice management software package that simplifies the transmission of test data and patient medical records.

The firm's technology-based intangibles are complemented by another intangible assets in the form of sales reps and a commercial organization that provides high-touch service to animal hospitals, including counsel on optimizing hospital operations and improving the profit profile.

Second, Idexx's moat is bolstered by switching costs across a number of its products. For example with Idexx's Cornerstone practice management software, once the animal hospital staff has invested the time to enter all the patient and client information and become familiar with the software, the inconvenience of installing and learning a whole new system means customers tend to stick with Idexx. The same principle applies to its in-house test equipment. Once the practice has installed the base equipment and trained its vet techs on it, practices are more likely to stick with Idexx than to switch to another brand. Customer switching costs also rise further if the vet practice purchases multiple Idexx products and services. For example, customer retention is noticeably higher for the practices that combine Idexx reference labs, Idexx in-house analyzers, and Idexx software that integrates all the diagnostic information.

Third, Idexx also enjoys a cost advantage over other diagnostic labs because of its extensive scale. With a large, national lab network, Idexx is able to run these tests at lower costs thanks to higher throughput. Volume and ensuing efficient use of the labs result in more attractive margins than smaller-scale independent labs can offer. Idexx and rival VCA Antech have created a duopoly in this market, and each has built out route networks that are dense and efficient. All of these elements that contribute to Idexx's moat have rendered price a tertiary factor in Idexx's competitive approach.

Idexx has gained the scale that allows it to make serial acquisitions of any new competitors that might emerge as a serious threat. In recent years, Idexx has solidified its position in Europe with a new major reference lab in Germany, entered the biomedical clinical testing market through its acquisition of RADIL, and acquired a distributor in Brazil.

In terms of environmental, social, and governance issues, Sustainalytics pegs Idexx's risk exposure at medium. We're inclined to view Idexx's ESG risk as similar to, or even lower, than the low ratings that Sustainalytics has extended to the human reference labs, Quest Diagnostics and LabCorp. Similar to the human labs, Idexx faces some of the same risks of inaccurate test results that could lead to inappropriate medical care. However, the stakes aren't quite as high, in our opinion, because the vast majority of Idexx's diagnostics business is focused on pets. 

Sustainalytics specifically calls out Idexx's diagnostics for water and production animals where faulty test results could lead to contaminated food or water for human consumption. We think the probability of this event is very low—none since at least 2004. Further, it is not a material risk, considering the water and production animal segments each account for roughly 6% of consolidated revenue. 

Finally, we give credit to Idexx on the social front for partnering with Tuskegee University vet school, which has trained more than 70% of the black veterinarians in the U.S., to offer fully funded scholarships. According to the Bureau of Labor Statistics, black vets accounted for less than 1% of U.S. veterinarians in 2019—a decline from 2.1% in 2016.

Narrow

Economic Moat

IDEXX Laboratories

IDEXX Laboratories, Inc. engages in the development, manufacture, and distribution of products and services for the animal veterinary, livestock and poultry, dairy and water testing markets. It operates through the following segments: Companion Animal Group (CAG), Water, Livestock, Poultry and Dairy (LPD), and Other. The CAG segment provides diagnostic and information management-based products and services for the companion animal veterinary industry, including in-clinic diagnostic solutions, outside reference laboratory services, and veterinary software and services. The Water segment offers innovative testing solutions for easy, rapid, and accurate detection and quantification of various microbiological parameters in water. The LPD segment develops diagnostic tests, services, and related instrumentation that are used to manage the health status of livestock and poultry, to improve producer efficiency, and to ensure the quality and safety of milk and food. The Other segment is composed of products for the human point-of-care medical diagnostics market with its out-licensing arrangements. The company was founded by David Evans Shaw on December 19, 1983, and is headquartered in Westbrook, ME.

Earnings data Q2 2021

Earnings data Q3 2021

Earnings data Q4 2021

Earnings data Q1 2022

Earnings data Q2 2022

Earnings data Q3 2022

Earnings data Q4 2022

Earnings data Q1 2023

Earnings data Q2 2023

Earnings data Q3 2023

Earnings data Q4 2023

Earnings data Q1 2024

Earnings data Q2 2024

IDEXX reports strong Q1 earnings, commits to enhancing pet care

IDEXX Laboratories had a strong start to 2023, driven by solid organic revenue growth and improved operating margins. The company is maintaining its outlook for solid operating margin performance in 2023 and is committed to enhancing the standard of care for Companion Animal health care. Challenges include macro trends impacting same-store sales and the need to address fragmented pet oncology diagnostics and treatment protocols.

IDEXX reports robust Q2 performance, eyes pet population expansion

IDEXX Laboratories delivered strong financial results, maintaining solid gross margins and achieving robust organic revenue growth. While facing pricing pressure and international headwinds, the company anticipates growth opportunities in the expansion of the pet population and new platform launches.

IDEXX reports solid Q3 performance and emphasizes long-term growth potential

IDEXX delivered strong financial results in Q3, surpassing revenue and profit expectations. Despite challenges in clinical visits and macro pressures, the company remains well-positioned for long-term growth and is focused on innovation and market expansion.

IDEXX reports strong Q4 2023 earnings and targets 10% organic growth in 2024

IDEXX delivered strong financial performance in Q4 2023 and the full year, driven by organic revenue growth and EPS increase. The company's outlook for 2024 reflects confidence in sustained growth and innovation. However, IDEXX faces challenges related to the launch of new products and headwinds from previous financial gains.

Revenue

Cost of revenue

Gross profit

Operating expenses

SG&A

Operating income

EBITDA

Net income

Earnings per share

Total assets

Current assets

Cash & equivalents

Receivables

Inventory

Non-current assets

Net PPE

Intangibles

Total liabilities

Current liabilities

Short term debt

Income tax payable

Non-current liabilities

Long-term debt

Total equity

Stockholders equity

Minority interest

Total liabilities & equity

Total debt

Net debt

Book value per share

Cash from operations

Funds from operations

Change in working capital

Cash from investing

Capital expenditure

Purchase/sale of investments

Purchase/sale of business

Other sources

Cash from financing

Change in stock

Change in debt

Cash dividends paid

Cash from other sources

Net change in cash

Free cash flow

IDEXX Laboratories, Inc. engages in the development, manufacture, and distribution of products and services for the animal veterinary, livestock and poultry, dairy, and water testing markets. It operates through the following segments: Companion Animal Group (CAG), Water Quality Products (Water), Livestock, Poultry, and Dairy (LPD), and Other. The CAG segment provides diagnostic and information management-based products and services for the companion animal veterinary industry, including in-clinic diagnostic solutions, outside reference laboratory services, and veterinary software and services. The Water segment offers innovative testing solutions for easy, rapid, and accurate detection and quantification of various microbiological parameters in water. The LPD segment develops diagnostic tests, services, and related instrumentation that are used to manage the health status of livestock and poultry, to improve producer efficiency, and to ensure the quality and safety of milk and food. The Other segment is composed of products for the human point-of-care medical diagnostics market with its out-licensing arrangements. The company was founded by David Evans Shaw on December 19, 1983, and is headquartered in Westbrook, ME.

IDXX stock has soared over the past year, and is continuing its climb today thanks to the recommendation of one well-known analyst. The post IDXX Stock: Why Pet Care Play Idexx Laboratories Is Moving Today appeared first on InvestorPlace.

IDXX Stock: Why Pet Care Play Idexx Laboratories Is Moving Today

Corteva Inc

DuPont de Nemours

Deere & Company

Farmland Partners

Gladstone Land

Starboard Value Acquisition Corp.

Zoetis

Investing in Agriculture Stocks: What Investors Need to Know

Chewy

Freshpet

PetIQ

PetMed Express

Trupanion

Zomedica

Pet stocks have performed very well recently, and many analysts believe that this trend will continue as the industry grows. The post 7 Pet Stocks for Animal Lovers and Investors Alike appeared first on InvestorPlace.

7 Pet Stocks for Animal Lovers and Investors Alike

IDEXX (IDXX) registeres strong contribution from its CAG business in the fourth quarter despite pandemic-induced challenges.

IDEXX (IDXX) Earnings Beat Estimates in Q4, Margins Rise

IDEXX Laboratories, Inc. (IDXX) CEO Jay Mazelsky on Q4 2020 Results - Earnings Call Transcript

Idexx (IDXX) delivered earnings and revenue surprises of 40.56% and 5.79%, respectively, for the quarter ended December 2020. Do the numbers hold clues to what lies ahead for the stock?

Idexx Laboratories (IDXX) Beats Q4 Earnings and Revenue Estimates

Shares of IDEXX Laboratories (NASDAQ:IDXX) were unchanged after the company reported Q4 results. Quarterly Results Earnings per share were up 69.23% year over year to $1.76, which beat the estimate of $1.40.

Recap: IDEXX Laboratories Q4 Earnings

WESTBROOK, Maine, Feb. 2, 2021 /PRNewswire/ -- Achieves fourth quarter reported revenue growth of 19% and organic growth of 17%, driven by CAG Diagnostics recurring revenue reported growth of 23% and organic growth of 21% High revenue growth supported by sustained strong global trends in...

IDEXX Laboratories Announces Fourth Quarter and Full Year 2020 Results

On Tuesday, February 02, IDEXX Laboratories (NASDAQ:IDXX) will release its latest earnings report. Here is Benzinga's outlook for the company.

Earnings Preview for IDEXX Laboratories

IDEXX's (IDXX) fourth-quarter top line is likely to have benefited from strength in CAG and LPD businesses.

What's in Store for IDEXX Laboratories (IDXX) in Q4 Earnings?

Royal Philips

Cassava Sciences Inc

These three healthcare stocks all had a good year in 2020, and their businesses look to have plenty of growth again in 2021.

The 3 Best Healthcare Stocks to Buy for 2021

Nestle SA

Rising pet ownership rates and a steadily increasing average household spending provide a powerful tailwind to this investment theme. Pet food, animal health, veterinary equipment, and specialized e-commerce are all fields prone to profit from the secular growth trend.

Growth In Pet Spending Is Off The Leash, Here Is How To Profit From It

AGCO

D.R. Horton

MSCI

Earnings growth is considered the most important variable in influencing the share price. Notably, some of the stocks that boast of superb earnings growth include D.R.

4 of the Best Stocks to Buy for Solid Earnings Growth in 2021

WESTBROOK, Maine, Jan. 11, 2021 /PRNewswire/ -- IDEXX Laboratories, Inc. (NASDAQ: IDXX), a global leader in veterinary diagnostics, veterinary practice software and water microbiology testing, has scheduled the release of its 2020 fourth quarter and full-year financial results for...

IDEXX Laboratories to Release 2020 Fourth Quarter and Full-Year Financial Results

Hologic

Owens & Minor

ResMed

We have selected five MedTech growth stocks with further rooms for improvement in 2021.

5 Soaring MedTech Stocks to Buy for More Growth in 2021

Albemarle

Advanced Micro Devices

Cadence Design Systems

Etsy

L Brands

ServiceNow

NVIDIA

PayPal

Tesla

If a Santa Claus rally grips Wall Street in the final days of December, the S&P 500 could see smart gains in 2020 despite the COVID-19 outbreak. These stocks helped the index to hit highs this year.

10 Top-Performing Stocks of the S&P 500 ETF in 2020

Church & Dwight

Lemonade

Americans love their pets, and no pandemic, not even the novel coronavirus, will change that, bolstering these eight pet stocks. The post 8 Pet Stocks That Will Make You Purr appeared first on InvestorPlace.

8 Pet Stocks That Will Make You Purr

IDEXX (IDXX) sees sturdy gains in CAG Diagnostics recurring revenues, supported by high organic gains in both U.S. and International markets.

IDEXX (IDXX) Gains on CAG Sales, Global Growth Remains Robust

Align Technology

Intuitive Surgical

Four large-cap MedTech stocks are currently flourishing on the back of several positive developments

4 Large Cap MedTech Stocks to Keep Winning Streaks Alive in 2021

Thermo Fisher Scientific

West Pharmaceutical Services

Here are a few MedTech stocks which continued to outperform their respective industries amid the pandemic and can turn out to be wise investment choices.

5 MedTech Stocks That Have Outperformed the Industry in 2020

Idexx (IDXX) is well positioned to outperform the market, as it exhibits above-average growth in financials.

3 Reasons Why Idexx (IDXX) Is a Great Growth Stock

STRATTEC SECURITY

Top Ranked Growth Stocks to Buy for December 14th

CrowdStrike

Trade Desk

Here we pick five large cap stocks -- LB, TTD, IDXX, NVDA & CRWD -- that are well-poised to grow on solid fundamentals and gradual economic recovery.

Stimulus or No Stimulus, These Large Caps Are Must Buys

Laboratory

To beat the pandemic blues and maximize capital gains, investors can now scoop up these fundamentally-strong MedTech growth stocks.

3 Growth Stocks to Tap the COVID-Driven Shift in MedTech

If you are looking for a fast-growing stock that is still seeing plenty of opportunities on the horizon, make sure to consider IDEXX Laboratories (IDXX).

News for IDEXX Laboratories Stock (IDXX)