Idexx Laboratories Inc
Idexx Laboratories Inc
IBD Stock Analysis
- Shares now are forming a flat base with a buy point at 707.05
- Company in medical-systems/equipment group, which ranks 6th
- Composite Rating is 98 out of 99; Relative Strength Rating is 90
Industry Group Ranking
* Not real-time data. All data shown was captured at
1:00PM EDT on
The animal-health company provides diagnostics equipment and tests for veterinarians. Credit Suisse analyst Katie Tryhane notes there are “inherent advantages” in the animal health sector over its human counterpart. For example, insurance reimbursement isn’t the same obstacle when it comes to medicine for Buddy and Bandit.
Meanwhile, pet adoptions are also on the rise. Idexx and fellow animal-health stock Covetrus (CVET) recently called out 6% growth in pet adoptions last year, Tryhane said in a report. Idexx also recently raised its total addressable market expectation to $37 billion, up from its $33 billion projection in 2019.
“We continue to view the animal-health sector as an attractive alternative health care investment, with continuing strength in demand along with inherent advantages over human health care including more efficient (research and development), sustainable portfolios and limited reimbursement concerns,” Tryhane said. She has an outperform rating on Idexx stock.
Idexx Stock Eyes Multiple Opportunities
Investors in Idexx stock are noticing the pop — not only for animal-health companies, but also for the life sciences tools and diagnostics segment. Idexx is part of the Medical-Systems/Equipment industry group on IBD Digital. That group ranks sixth out of 197 groups tracked by Investor’s Business Daily.
The entire group is enjoying a two-month run in which it has stayed above its key moving averages.
Idexx stock ranks sixth in that group with a Composite Rating of 98 out of a best-possible 99. The CR measures a stock’s fundamental and technical growth measures. This puts Idexx stock in the top 2% of all stocks regardless of industry group.
Also promising, Idexx stock has a strong Relative Strength Rating of 90. So, shares rank in the leading 10% of all stocks in terms of 12-month performance.
On MarketSmith.com‘s weekly chart, shares of Idexx are forming a flat base with a buy point at 707.05. But Idexx stock is also finding support at its 50-day and 10-week lines. A bounce off the 10-week line would make shares actionable.
Idexx representatives didn’t immediately respond to a request for comment from IBD.
Pet Adoptions Spark Long-Term Growth
Credit Suisse’s Tryhane expects the strength to continue for Idexx. During its recent Investor Day, the company guided to 10% top-line growth over the next five years.
Idexx also expects its operating margin to expand, driven by highly profitable recurring revenue, price increases, efficiencies in its reference labs and direct sales efforts. The company further called for profit growth of 15%-20%. That’s consistent with its previous long-term view.
Earlier this month, Idexx launched its newest hematology analyzer, dubbed ProCyte One. Better-than-expected placement of ProCyte One at veterinary clinics could also drive upside, Tryhane said. After the company’s Investor Day, she raised her price target on Idexx stock to 760 from 735.
Vets’ Diagnostic Use Is Growing
Diagnostic use is growing at veterinary clinics, Tryhane said. During the pandemic, people spent more time with their pets — helping them notice new health issues. Working from home also makes it easier to take a pet to the vet. These trends have bolstered Idexx stock, she says.
She referenced a June 2021 report highlighting “that over 88% of pet owners consider their pet’s health is as important to them as taking care of their own health (vs. 77% with July 2020 survey), underscoring some of the incrementally encouraging pandemic-driven tailwinds.”
Follow Allison Gatlin on Twitter at @IBD_AGatlin.
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