Here's Why You Should Invest In IDEXX Laboratories (IDXX) Now

IDEXX Laboratories, Inc. (NASDAQ:IDXX) , a leading manufacturer of products and services primarily for the companion animal veterinary, has rallied 9.1% over the last six months, beating the S&P 500’s 5.3% gain. The stock has a market cap of $13.55 billion. The company’s five-year historical growth rate is also favorable at 19.8% as compared with 18% of the broader industry.

Also, the company represented a return of almost 9.1%, better than the broader industry’s gain of 8.2% over the last year.

With solid prospects, this Zacks Rank #2 (Buy) stock is an attractive pick at the moment.

The company’s estimate revision trend for the current year has also been positive. In the past 60 days, five analysts moved north, with no movement in the opposite direction. The magnitude of estimate revision for earnings rose around 3.9% to $3.17 per share over the same time frame.

Let’s find out whether the recent positive trend is a sustainable one. Recently, IDEXX ended the second quarter of 2017 on a solid note, with earnings and revenues beating the Zacks Consensus Estimate.

The stellar quarterly performance was driven by the company’s companion animal business. The companion animal market fundamentals remain solid with tremendous global runway for growth. Management’s unique innovation-based, multi-modality global strategy, enabled by enhanced commercial capability, accelerated recurring CAG Diagnostics revenue growth. Moreover, the strong top-line growth in this quarter was driven by considerable contributions from the rest of the business segments.

Also, IDEXX recently announced the addition of rVetLink to its portfolio of technology applications. Notably, rVetLink is an advanced all-inclusive referral management solution designed for specialty care hospitals that simplifies the referral procedure between primary care and specialty care veterinarians.

This apart, IDEXX continues to display solid growth with respect to international expansion. The company has been significantly benefitting from the companion animal market of emerging nations, demonstrating the bountiful opportunities.

Additionally, the company has a strong cash balance that enables it to carry out share repurchase programs and in turn provide solid returns to investors.

On the flip side, foreign currency fluctuation is a major headwind for the company. Another concern is the company’s high reliance on third-party distributors. The purchasing dynamics of distributors have a significant impact on the company’s sales of instrument consumables and rapid assay products. Also, the company faces higher operating expenses pertaining to increased head count along with higher investments targeted toward growth acceleration in geographical expansion in the United States and internationally, and portfolio expansion. Moreover, the competitive landscape in the domestic and overseas markets weighs on IDEXX’s performance.

Other Key Picks

Other top-ranked medical stocks are Edwards Lifesciences Corp. (NYSE:EW) , Steris Plc (NYSE:STE) and Lantheus Holdings, Inc. (NASDAQ:LNTH) . Edwards Lifesciences sports a Zacks Rank #1 (Strong Buy), while Steris and Lantheus Holdings carry a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Edwards Lifesciences has a long-term expected earnings growth rate of 15.2%. The stock has gained around 28.8% over the last six months.

Steris has a positive earnings surprise of 0.78% for two of the trailing four quarters. The stock has gained 26.3% over the last six months.

Lantheus Holdings has a long-term expected earnings growth rate of 12.5%. The stock has gained 66.1% over the last six months.

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