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IDXX

IDEXX Laboratories NasdaqGS:IDXX Stock Report

Last Price

US$407.00

Market Cap

US$34.2b

7D

2.2%

1Y

-40.7%

Updated

08 Aug, 2022

Data

Company Financials +
IDXX fundamental analysis
Snowflake Score
Valuation1/6
Future Growth3/6
Past Performance2/6
Financial Health4/6
Dividends0/6

IDXX Stock Overview

IDEXX Laboratories, Inc. develops, manufactures, and distributes products and services primarily for the companion animal veterinary, livestock and poultry, dairy, and water testing markets worldwide.

IDEXX Laboratories, Inc. Competitors

Price History & Performance

Summary of all time highs, changes and price drops for IDEXX Laboratories
Historical stock prices
Current Share PriceUS$407.00
52 Week HighUS$695.18
52 Week LowUS$318.50
Beta1.14
1 Month Change7.54%
3 Month Change19.64%
1 Year Change-40.71%
3 Year Change47.58%
5 Year Change162.04%
Change since IPO42,954.57%

Recent News & Updates

Aug 08

IDEXX Laboratories Stock Is Very Expensive

I'd characterize the financial performance here for IDEXX Laboratories as "mixed." The top and bottom lines have grown nicely over time, though the capital structure has deteriorated. In spite of this, IDXX stock is even more expensive than when I last reviewed the name. IDEXX Laboratories shares have risen dramatically since I avoided them years ago. I'm reminded that we're not seeking "returns", we're seeking "risk adjusted returns." I’ve been in the mood to take a walk down memory lane lately, and that has prompted me to review some of the earliest articles I wrote on this platform. As I reread these I’m struck by how mind numbingly boring I was (am?). Anyway, I want to write about one of the stocks that “got away”, so I’m going to put my thoughts about IDEXX Laboratories Inc. (IDXX) to virtual ink. Way back in February 2018, I wrote a piece where I recommended investors avoid this name because it was very expensive. Right on time, the shares went on a tear, and are up about 130% against a gain of about 53% for the S&P 500 since then. I thought I’d revisit the name to try to work out whether or not it makes sense to buy. I’ll make that determination by looking at the most recent financial performance, and by looking at the stock as a thing distinct from the underlying business. Welcome to my “thesis statement” paragraph. As you may recall, I put one of these near the beginning of each of my articles because reading 1,500-2,000 of my words can be a trial for some people. You’re welcome. I am of the view that IDEXX Laboratories is a bad investment at the moment. Although the company’s financial performance is (mostly) good, the shares are very expensive, and are priced for near perfection. This is never a great sign in my view. You may complain that this is the exact same advice I gave years ago, and had you followed it, you would have missed out on a great return. You would be right to remind me that even then I was admitting that the company’s segments (Animal Companion and Veterinary etc.) had great tailwinds behind them, and that this was a great company that I couldn’t “pull the trigger” on. That’s all true, but consider the following. First, ask yourself if the next four years of market returns will resemble the past? If so, then maybe the optimism fueled crowd may continue to drive these shares higher. Also, we’re not seeking “returns”, we’re seeking “risk adjusted returns”, and if the valuation is stretched, sooner or later chickens come home to roost. That’s a bad hair day when it happens. In a world where you can buy many, many other profitable stocks at far more reasonable valuations, I would avoid the shares of this great business until they drop to a more reasonable level. IDEXX Laboratories Financial Snapshot Since I last wrote about it, this company has had a spectacularly good financial result in many ways. Specifically, relative to when I last reviewed the name, annual revenue is up by about 63%, and net income has climbed an eye watering 182%. I think this gives some sense for why the shares have done so very well from early 2018. Things look slightly less good when we compare the first six months of 2022 with the same period a year ago. Although revenue in 2022 is about 5.8% higher than it was this time last year, net income is about 20% lower. All expenses are higher in 2022 than they were in 2021, but the 117% uptick in R&D expenses is the standout reason for the drop in profits. This isn’t the end of the world, but it’s noteworthy, and I think we should keep an eye on the R&D expensive going forward in order to determine whether or not we’re in a “new normal.” As troubling in my estimation is the deterioration of the capital structure. Specifically, long term debt and the line of credit are about 37% higher than in 2018. Borrowings are currently just under $1.4 billion. If I were an investor here, I would have preferred they pay down some of this debt over the past six months, rather than buy back $554 million worth of stock. I would prefer that unless management repurchased these shares at a nice discount. Idexx Financials (Idexx investor relations) The Stock That question of whether or not management spent half a billion dollars buying back shares at a reasonable price is of critical importance, and highlights the fact that the business and the stock are distinct things, though are connected, obviously. They’re connected, but I think the stock is often a very poor proxy for the business that it supposedly represents. A business buys a number of inputs, adds value to them, and then sells the results at a profit. The stock, on the other hand, is a traded instrument that reflects the crowd's aggregate belief about the long-term prospects for the company, and may also be influenced by management using owner’s capital to buy owner’s shares. Given stock volatility, it seems that the crowd is capricious and changes its views about the company relatively frequently, which is what drives the share price up and down. Added to that is the volatility induced by the crowd's views about “the market” in general. "Stocks" become more or less attractive, and the shares of a given company get taken along for the ride. This leads me to a significant point that I want to drive home: the only way to consistently make money in stocks is to spot the discrepancies between the current assumptions embedded in price and subsequent returns. So, if our approach involves investing based on something we read in The Journal, we’re going to do badly over time. This is because by the time the information hits our screens, it’s been priced into the stock price. If we want to make money, we need to spot discrepancies. In particular, if we want to go long a stock, we should only ever do so when the crowd is feeling pessimistic. That’s my point in a nutshell. It's typically the case that the lower the price paid for a given stock, the greater the investor's future returns. In order to buy at these cheap prices, you need to buy when the crowd is feeling particularly down in the dumps about a given name. As my regulars know, I measure the relative cheapness of a stock in a few ways ranging from the simple to the more complex. On the simple side, I like to look at the ratio of price to some measure of economic value, like earnings, sales, free cash, and the like. Once again, cheaper wins. Given all of the above, I don’t think we should be surprised by the fact that I blanched at this stock years ago when it was trading at a price to free cash flow ratio of about 52.5 times. Fast forward several years and things look even more expensive, per the following: IDXX data by YCharts In addition to looking at simple ratios, I want to try to understand what the market is currently "assuming" about the future of a given company. If you read me regularly, you know that I rely on the work of Professor Stephen Penman and his book "Accounting for Value" for this. In this book, Penman walks investors through how they can apply the magic of high school algebra to a standard finance formula in order to work out what the market is "thinking" about a given company's future growth. This involves isolating the "g" (growth) variable in a fairly standard finance formula. Additionally, I’ve heard the complaint that Penman’s stuff may not be the most accessible book ever written. So, if you want an alternative to Penman, you could try Mauboussin and Rappaport. These two have recently updated their classic “Expectations Investing”, and it is excellent in my estimation.

Aug 02

IDEXX Laboratories Non-GAAP EPS of $1.58 misses by $0.05, revenue of $860.55M misses by $1.57M

IDEXX Laboratories press release (NASDAQ:IDXX): Q2 Non-GAAP EPS of $1.58 misses by $0.05. Revenue of $860.55M (+4.2% Y/Y) misses by $1.57M. FY2022 Outlook: Revenue in the range of $3.305B to $3.385B vs. consensus of $3.41B;  operating margins of 26.4% to 26.9%; EPS outlook of $7.77 - $8.05 reflects an adjustment of $0.32 at midpoint, including $0.05 of negative impact from higher projected interest rates and $0.03 of negative impact related to the strengthening U.S. dollar vs. consensus of $8.24.

Jul 26
Are IDEXX Laboratories, Inc. (NASDAQ:IDXX) Investors Paying Above The Intrinsic Value?

Are IDEXX Laboratories, Inc. (NASDAQ:IDXX) Investors Paying Above The Intrinsic Value?

In this article we are going to estimate the intrinsic value of IDEXX Laboratories, Inc. ( NASDAQ:IDXX ) by projecting...

Shareholder Returns

IDXXUS Medical EquipmentUS Market
7D2.2%2.4%1.1%
1Y-40.7%-21.3%-13.0%

Return vs Industry: IDXX underperformed the US Medical Equipment industry which returned -21.6% over the past year.

Return vs Market: IDXX underperformed the US Market which returned -12.9% over the past year.

Price Volatility

Is IDXX's price volatile compared to industry and market?
IDXX volatility
IDXX Average Weekly Movement5.7%
Medical Equipment Industry Average Movement9.8%
Market Average Movement7.9%
10% most volatile stocks in US Market17.1%
10% least volatile stocks in US Market3.2%

Stable Share Price: IDXX is not significantly more volatile than the rest of US stocks over the past 3 months, typically moving +/- 6% a week.

Volatility Over Time: IDXX's weekly volatility (6%) has been stable over the past year.

About the Company

FoundedEmployeesCEOWebsite
198310,350Jay Mazelskyhttps://www.idexx.com

IDEXX Laboratories, Inc. develops, manufactures, and distributes products and services primarily for the companion animal veterinary, livestock and poultry, dairy, and water testing markets worldwide. The company operates through CAG; Water Quality Products; LPD; and Other segments. It provides point-of-care veterinary diagnostic products, including instruments, consumables, and rapid assay test kits; veterinary reference laboratory diagnostic and consulting services; practice management and diagnostic imaging systems and services for veterinarians; and health monitoring, biological materials testing, and laboratory animal diagnostic instruments and services for biomedical research community.

IDEXX Laboratories, Inc. Fundamentals Summary

How do IDEXX Laboratories's earnings and revenue compare to its market cap?
IDXX fundamental statistics
Market CapUS$34.19b
Earnings (TTM)US$663.95m
Revenue (TTM)US$3.31b

51.5x

P/E Ratio

10.3x

P/S Ratio

Earnings & Revenue

Key profitability statistics from the latest earnings report
IDXX income statement (TTM)
RevenueUS$3.31b
Cost of RevenueUS$1.37b
Gross ProfitUS$1.94b
Other ExpensesUS$1.28b
EarningsUS$663.95m

Last Reported Earnings

Jun 30, 2022

Next Earnings Date

n/a

Earnings per share (EPS)7.90
Gross Margin58.70%
Net Profit Margin20.07%
Debt/Equity Ratio301.7%

How did IDXX perform over the long term?

See historical performance and comparison