IDEXX Laboratories, Inc. (NASDAQ:IDXX) is one of the Best Stocks to Buy According to Brasada Capital Management. On July 17, Leerink analyst Daniel Clark lifted the company’s price objective to $600 from $580, while keeping an “Outperform” rating. The firm likes IDEXX Laboratories, Inc. (NASDAQ:IDXX)’s setup over the upcoming few years and increased the 12-month price target after channel checks and its semi-annual veterinarian survey. The company drove strong execution in Q1 2025, while advancing critical enablers of its innovation-driven growth strategy.
A veterinarian in a veterinary clinic examining a companion animal.
At the end of March, IDEXX Laboratories, Inc. (NASDAQ:IDXX) launched a first-of-its-kind innovation, IDEXX Cancer Dx™, in its North American reference laboratories. The company saw Q1 2025 revenue growth of 4% (as reported) and 5% (organic), thanks to CAG Diagnostics recurring revenue growth of 3% (as reported) and 4.5% (organic). The organic revenue growth was helped by benefits from IDEXX execution drivers, which include continued robust new business gains and healthy YoY global premium instrument installed base growth, including more than 300 IDEXX inVue Dx™ placements.
IDEXX Laboratories, Inc. (NASDAQ:IDXX) saw EPS of $2.96, reflecting 5% increase (as reported) and 7% (on a comparable basis), thanks to the gross margin expansion of 90 bps (as reported) and 80 bps (on a comparable basis). Polen Capital, an investment management company, released its Q2 2025 investor letter. Here is what the fund said:
“In the second quarter, we initiated a new position in IDEXX Laboratories, Inc. (NASDAQ:IDXX) and eliminated our positions in Apple and UnitedHealth Group. IDEXX Labs is a global leader in pet diagnostics, offering in-clinic diagnostics (razor and razor blade consumables) and out-of-clinic reference labs. We have researched the business for two decades and admired its durable competitive advantages, highly recurring and profitable business model, attractive runway, supported by tailwinds from pet ownership and the “humanization of pets,” and strong execution by its management team. IDEXX employs a successful “surround the customer” strategy by offering diagnostic tests across many modalities, along with imaging and veterinary practice management software. With a dominant market share in pet diagnostic tests, IDEXX continues to expand its addressable market by innovating new types of testing and creating additional revenue streams for its veterinary customers. We envision years of continued innovation and market expansion, with minimal competitive threats.
Historically, we questioned IDEXX’s persistently high valuation. However, the recent, transitory business slowdown—driven by fewer vet clinic visits as COVID-era pets remain relatively young— has made the valuation more attractive. We believe the company’s long-term outlook remains largely unchanged. As these pets approach 6-7 years of age, their vet care needs will increase, supporting our expectation for sustained double-digit organic revenue growth and mid-to-high teens EPS growth. Even with EPS growth at least in line with the portfolio average, we expect IDEXX to also exhibit safety-like characteristics due to its unique competitive position, recurring revenues, and loyal shareholder base.”
IDEXX Laboratories, Inc. (NASDAQ:IDXX) is engaged in developing, manufacturing, and distributing products for the companion animal veterinary, livestock and poultry, dairy, and water testing industries.
While we acknowledge the potential of IDXX to grow, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than IDXX and that has 100x upside potential, check out our report about this cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
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