Time New York: Tue 19 Mar 22:47 pm  |  Save 15% on H&R Block Online


IDEXX: Strength in International Business & CAG Continues


On Nov 22, we issued an updated research report on Delaware, NJ-based IDEXX Laboratories, Inc. IDXX – a manufacturer and distributor of products and services primarily for the companion animal veterinary, livestock and poultry, water testing and dairy markets. The company currently sports a Zacks Rank #1 (Strong Buy).

IDEXX posted mixed third-quarter 2016 results, with earnings per share (EPS) handily beating the Zacks Consensus Estimate while revenues missed the mark. Solid organic revenue growth buoys optimism. The company’s raised EPS guidance for 2016 also indicates a bullish trend, going forward.

IDEXX continues to demonstrate solid growth globally, with strong international expansion. During the third quarter of 2016, the overall international revenues reflected strong organic growth of 11%, with 17% growth in international CAG Diagnostic's recurring revenues.

Strong 20% consumable revenue growth owing to incremental benefits from SDMA supporting continued double-digit gains in lab revenues as well as improved lab revenue gains primarily drove this overseas growth.

With respect to its Companion Animal Group (“CAG”) segment, IDEXX witnessed solid recurring Diagnostic gains and continued strong premium instrument placements, including benefits from the launch of SediVue. The company also holds a robust cash balance position.

On the flip side, foreign currency headwinds are a major concern, with approximately 39% of IDEXX’s sales coming from overseas. Evidently, foreign exchange fluctuations are expected to reduce its 2016 revenue growth by $2 million or 1% and EPS by 20 cents.

Moreover, the instrument consumables and rapid assay products at the company’s CAG segment are often sold by third-party distributors. Unfavorable distributor purchasing dynamics can affect IDEXX’s sales growth for these products. Competitive headwinds also pose a threat to the stock.

Other Key Picks

Other favorably ranked medical stocks are NxStage Medical Inc. NXTM, Baxter International Inc. BAX and Bovie Medical Corporation BVX. NxStage Medical and Baxter International sport a Zacks Rank #1 (Strong Buy), while Bovie Medical carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

NxStage Medical surged 23.4% in the last one year compared to the S&P 500’s 5.5% over the same period. The company has a four-quarter average positive earnings surprise of 50.00%.

Baxter International rallied 21.4% over one year, much higher than the S&P 500’s 5.5%. It has a trailing four-quarter average positive earnings surprise of 27%.

Bovie Medical recorded a 119.4% gain in the past one year, way better than the S&P 500’s 5.5%. The company has a trailing four-quarter average positive earnings surprise of 28.7%.

Zacks' Top Investment Ideas for Long-Term Profit

How would you like to see our best recommendations to help you find today’s most promising long-term stocks? Starting now, you can look inside our portfolios featuring stocks under $10, income stocks, value investments and more. These picks, which have double and triple-digit profit potential, are rarely available to the public. But you can see them now. Click here >>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

To read this article on Zacks.com click here.

Zacks Investment Research
<-- You can share this post with your network,
or give us your opinion and leave a comment.
Be sure to check our RSS feeds for updates.