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IDEXX (IDXX) CAG Placement Grows Sequentially Amid COVID-19 Woes

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Zacks Equity Research
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On Mar 19, we issued an updated research report on IDEXX Laboratories, Inc. IDXX. The company’s robust worldwide commercial capabilities and best-in-class products, including its next-generation chemistry analyzer, Catalyst One, would be key growth drivers in the days to come. The stock carries a Zacks Rank #2 (Buy), at present.

Over the past six months, IDEXX has been outperforming its industry with respect to share price movement. The stock has gained 32.8% compared with 2.9% rise of the industry.

IDEXX exited the fourth quarter of 2020 with better-than-expected results. Solid organic-revenue growth is encouraging. The top line was driven by strong sales at the CAG and LPD businesses. The company witnessed sturdy gains in CAG Diagnostics recurring revenues, supported by sustained strong global trends in pet healthcare in the quarter under review. The company’s performance in major geographies is also encouraging.

Further, the company’s human health business, OPTI Medical Systems’ COVID-19 human Polymerase Chain Reaction (PCR) testing also contributed to the top line. The upbeat initial financial outlook for 2021 provided by the company also instills investor confidence in the stock. Margin expansions are encouraging.

IDEXX Laboratories, Inc. Price

IDEXX Laboratories, Inc. Price
IDEXX Laboratories, Inc. Price

IDEXX Laboratories, Inc. price | IDEXX Laboratories, Inc. Quote

Amid the pandemic-led restrictions, IDEXX witnessed a sequential improvement in CAG instrument placements during the fourth quarter. Further, the quality of CAG instrument placements remained high despite the constraint on overall placement levels. Globally, IDEXX placed 414 Catalysts at new and competitive accounts in North America and 1,092 new and competitive placements in international markets.

Global Reference Lab revenues increased 18.9% organically, reflecting nearly 20% organic growth in the United States and mid-to-high teens organic gains in international markets. Gains in Reference lab revenues continue to be driven by high same-store volume growth along with strong gains across testing categories.

Nonetheless, the pandemic has limited the new CAG instrument placement levels, which is worrying. Other issues like foreign exchange fluctuations and impact of third-party distribution persist.

Meanwhile, the majority of IDEXX’s consolidated revenues is derived from the sale of products in international markets. Thus, the strengthening of the U.S. dollar exchange rate, relative to other currencies, left a negative impact on revenues derived in currencies other than the U.S. dollar as well as on profits drawn from products manufactured in the United States and sold internationally.

Other Key Picks

Some other top-ranked stocks from the broader medical space are Envista Holdings Corporation NVST, Hologic, Inc. HOLX and Abbott Laboratories ABT.

Envista’s long-term earnings growth rate is estimated at 24%.It currently carries a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Hologic’s long-term earnings growth rate is estimated at 15.4%. The company presently carries a Zacks Rank #2 (Buy).

Abbott’s long-term earnings growth rate is estimated at 14.1%. The company presently carries a Zacks Rank #2.

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Hologic, Inc. (HOLX) : Free Stock Analysis Report

Abbott Laboratories (ABT) : Free Stock Analysis Report

IDEXX Laboratories, Inc. (IDXX) : Free Stock Analysis Report

Envista Holdings Corporation (NVST) : Free Stock Analysis Report

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