At US$484, Is IDEXX Laboratories, Inc. (NASDAQ:IDXX) Worth Looking At Closely?

Today we're going to take a look at the well-established IDEXX Laboratories, Inc. (NASDAQ:IDXX). The company's stock saw a significant share price rise of over 20% in the past couple of months on the NASDAQGS. With many analysts covering the large-cap stock, we may expect any price-sensitive announcements have already been factored into the stock’s share price. However, what if the stock is still a bargain? Let’s take a look at IDEXX Laboratories’s outlook and value based on the most recent financial data to see if the opportunity still exists.

View our latest analysis for IDEXX Laboratories

What's The Opportunity In IDEXX Laboratories?

IDEXX Laboratories appears to be expensive according to my price multiple model, which makes a comparison between the company's price-to-earnings ratio and the industry average. I’ve used the price-to-earnings ratio in this instance because there’s not enough visibility to forecast its cash flows. The stock’s ratio of 59.09x is currently well-above the industry average of 36.69x, meaning that it is trading at a more expensive price relative to its peers. But, is there another opportunity to buy low in the future? Since IDEXX Laboratories’s share price is quite volatile, this could mean it can sink lower (or rise even further) in the future, giving us another chance to invest. This is based on its high beta, which is a good indicator for how much the stock moves relative to the rest of the market.

What does the future of IDEXX Laboratories look like?

Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at the company's future expectations. IDEXX Laboratories' earnings over the next few years are expected to increase by 46%, indicating a highly optimistic future ahead. This should lead to more robust cash flows, feeding into a higher share value.

What This Means For You

Are you a shareholder? It seems like the market has well and truly priced in IDXX’s positive outlook, with shares trading above industry price multiples. However, this brings up another question – is now the right time to sell? If you believe IDXX should trade below its current price, selling high and buying it back up again when its price falls towards the industry PE ratio can be profitable. But before you make this decision, take a look at whether its fundamentals have changed.

Are you a potential investor? If you’ve been keeping an eye on IDXX for a while, now may not be the best time to enter into the stock. The price has surpassed its industry peers, which means it is likely that there is no more upside from mispricing. However, the positive outlook is encouraging for IDXX, which means it’s worth diving deeper into other factors in order to take advantage of the next price drop.

If you'd like to know more about IDEXX Laboratories as a business, it's important to be aware of any risks it's facing. At Simply Wall St, we found 1 warning sign for IDEXX Laboratories and we think they deserve your attention.

If you are no longer interested in IDEXX Laboratories, you can use our free platform to see our list of over 50 other stocks with a high growth potential.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.