IDEXX Laboratories Gains on Solid Prospects & CAG Business

On Mar 9, we issued an updated research report on IDEXX Laboratories, Inc. IDXX. The company witnesses strong organic revenue growth in the international business. Additionally, its companion animal market fundamentals remain solid with tremendous global runway for growth. The stock carries a Zacks Rank #2 (Buy).

Also, this leading molecular diagnostic company has been outperforming its industry in the past three months. The stock has rallied 28.4% compared with 11% gain of the industry.

Meanwhile, IDEXX continues to demonstrate solid growth globally with strong international expansion. In fourth-quarter 2017, the company witnessed double-digit organic revenue growth in the international business. This upside was owing to continued consumable revenue gains supported by Catalyst instrument base and average testing utilization.

In international markets, the company witnessed considerable organic lab revenue gains supported by positive customer response to SDMA as well as significant growth in rapid assay sales. In addition, management experienced steady growth in reference labs led by consistent gains in Europe.


Furthermore, CAG organic revenue growth in low-double digits on strong VetLab consumables and CAG Diagnostics recurring organic revenue growth is impressive. We are also optimistic about the company’s expanding premium instrument base in the United States and international markets, including growth in competitive instrument placements, increasing utilization and continued customer retention.

Moving ahead, we expect the company to gain from the commercial launch of Catalyst SDMA Test in North America in January. IDEXX too entered into a global agreement with a diagnostic company — Applied BioCode­ — in the same month.

Moreover, IDEXX has a strong cash balance that allows it to carry out share repurchases. Nevertheless, its high dependence on third-party distributors and intense competition continue to pose threats. 

Other Stocks to Consider

Some other top-ranked stocks in the broader medical sector are PerkinElmer PKI, Bio-Rad Laboratories BIO and athenahealth, Inc. ATHN.

PerkinElmer has a long-term expected earnings growth rate of 12.3%. The stock carries a Zacks Rank #2.

Bio-Rad Laboratories sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here. The company has a long-term expected earnings growth rate of 20%.

athenahealth is a Zacks #1 Ranked player. The company has a long-term expected earnings growth rate of 21.5%.


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