What Makes IDEXX Laboratories (IDXX) a Good Investment?

Macquarie Asset Management, an investment management company, released its “Macquarie Large Cap Growth Fund” first quarter 2025 investor letter. A copy of the letter can be downloaded here. In the first quarter, Macquarie Large Cap Growth Fund Institutional Class shares posted negative absolute returns; however, they surpassed the performance of the Fund’s benchmark, the Russell 1000® Growth Index. Despite market challenges, the firm’s investment style performed well, focusing on higher-quality businesses. For more information on the fund’s best picks in 2025, please check its top five holdings.

In its first-quarter 2025 investor letter, Macquarie Large Cap Growth Fund highlighted stocks such as IDEXX Laboratories, Inc. (NASDAQ:IDXX). IDEXX Laboratories, Inc. (NASDAQ:IDXX) develops, manufactures, and distributes products primarily for the companion animal veterinary, livestock and poultry, dairy, and water testing markets. The one-month return of IDEXX Laboratories, Inc. (NASDAQ:IDXX) was 3.14%, and its shares gained 8.57% of their value over the last 52 weeks. On June 24, 2025, IDEXX Laboratories, Inc. (NASDAQ:IDXX) stock closed at $530.50 per share, with a market capitalization of $42.664 billion.

Macquarie Large Cap Growth Fund stated the following regarding IDEXX Laboratories, Inc. (NASDAQ:IDXX) in its Q1 2025 investor letter:

“During the quarter, we exited two positions, including Electronic Arts, discussed above, and added four stocks to the portfolio. One of our new positions is in IDEXX Laboratories, Inc. (NASDAQ:IDXX), an animal health company with a primary focus on diagnostics for companion pets. The stock was weak over the past year as the COVID-19 pandemic pet boom and associated veterinary clinic visits normalized. The company is dominant in the space with a large installed base of its diagnostic equipment, which in turn drives the consumables business – a classic razor/razorblade model. As the large population of pets adopted during the pandemic age, there will be an increased need for vet services and testing. We took advantage of weakness in shares to start a position.”

Jim Cramer on IDEXX Laboratories, Inc. (IDXX): “I Just Can't Get My Arms Around It”

A veterinarian in a veterinary clinic examining a companion animal.

IDEXX Laboratories, Inc. (NASDAQ:IDXX) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 51 hedge fund portfolios held IDEXX Laboratories, Inc. (NASDAQ:IDXX) at the end of the first quarter, which was 58 in the previous quarter. In the first quarter of 2025, IDEXX Laboratories, Inc. (NASDAQ:IDXX) reported organic revenue growth of 5% driven by 4.5% organic revenue gains in the CAG business, 7% organic growth in water, and 4% organic growth in LPD. While we acknowledge the potential of IDEXX Laboratories, Inc. (NASDAQ:IDXX) as an investment, our conviction lies in the belief that 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 as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the undervalued AI stock set for massive gains.

In another article, we covered IDEXX Laboratories, Inc. (NASDAQ:IDXX) and shared the list of best healthcare stocks to buy. In addition, please check out our hedge fund investor letters Q1 2025 page for more investor letters from hedge funds and other leading investors. While we acknowledge the potential of IDXX as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you’re looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

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Disclosure: None. This article is originally published at Insider Monkey.