We came across a bullish thesis on IDEXX Laboratories, Inc. (IDXX) on Substack by Business Model Mastery. In this article, we will summarize the bulls’ thesis on IDXX. IDEXX Laboratories, Inc. (IDXX)’s share was trading at $417.86 as of Jan 28th. IDXX’s trailing and forward P/E were 40.33 and 36.90 respectively according to Yahoo Finance.
A veterinarian in a veterinary clinic examining a companion animal.
IDEXX Laboratories is at the forefront of the animal health industry’s transformation, particularly through its leadership in diagnostics and software solutions. As pet owners increasingly view their animals as family members, IDEXX has capitalized on the growing demand for advanced veterinary care. In Q3 2024, the company reported a 7% organic growth in its Companion Animal Group Diagnostics Recurring Revenues, underscoring the shift toward proactive pet care. This is especially crucial as aging pets require more sophisticated diagnostic tools and early disease detection. IDEXX’s premium diagnostics platforms, like Catalyst and Hematology, are experiencing double-digit growth in placements, signaling that veterinarians are embracing the trend toward early intervention.
The growing importance of diagnostics in veterinary care has made IDEXX a key player in the space. Even as overall clinical visits in the U.S. declined by 2.1% in the face of economic pressures, diagnostic visits saw an increase, highlighting the increasing reliance on diagnostics. IDEXX’s Reference Lab Revenues grew organically by 2%, demonstrating its strong retention rates of over 97%, which is a testament to the value its diagnostic services provide to veterinary practices. The broader veterinary diagnostics market is expected to grow at a 9.6% CAGR, reaching $8.9 billion by 2027, with IDEXX poised to capture a significant share of this expansion.
As the global veterinary market evolves, IDEXX has expanded its reach internationally, with a 10% organic growth in international revenues, particularly from markets like China and Europe. The company’s international presence positions it well to capitalize on the global demand for high-quality diagnostic solutions. Additionally, IDEXX is increasingly seen as a critical player in the $1.1 billion canine oncology diagnostics market, targeting an area of care that is expected to see significant growth in the coming years.
IDEXX’s commitment to diagnostics extends beyond just its instruments and consumables. The company is pioneering new care pathways by offering comprehensive diagnostic solutions that help veterinarians manage chronic conditions, like arthritis and cancer, more effectively. For example, its diagnostic tools played a key role in the successful uptake of Zoetis’s Librela for osteoarthritis treatment, showing how diagnostics-driven care is transforming the landscape of veterinary medicine.
With its strong market position and ongoing innovation in diagnostics and software, IDEXX is well-positioned to continue driving the evolution of the animal health industry. The company’s focus on global expansion, high-quality diagnostics, and early disease detection ensures that it will remain a key player in shaping the future of veterinary care.
IDEXX Laboratories, Inc. (IDXX) is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 42 hedge fund portfolios held IDXX at the end of the third quarter which was 41 in the previous quarter. While we acknowledge the risk and potential of IDXX as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than IDXX but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article was originally published at Insider Monkey.