IDEXX Laboratories, Inc. (IDXX) delivered better-than-expected Q3 2021 results that affirm the impact of ongoing investments in innovation and global commercial capability. Revenue and earnings topped consensus estimates. Nonetheless, IDXX shares fell 5.87% to close at $627.35 on November 2.
IDEXX Laboratories is a U.S.-based company that develops, manufactures, and distributes products and services for animal veterinary. It operates through the Companion Animal Group; Water Quality Products; Livestock, Poultry and Dairy; and Other segments.
The company achieved third-quarter revenue of $810 million, representing 12% year-over-year growth, and above consensus estimates of $798.16 million. The increase was mostly driven by a Companion Animal Group Diagnostics recurring revenue growth of 13%, or 11% organic growth.
Diluted EPS landed at $2.03, exceeding consensus estimates of $1.91. Q3 EPS was supported by operating margin gains of 410 basis points and $0.05 per share in tax benefits and share-based compensation. (See Top Smart Score Stocks on TipRanks)
During the quarter, IDEXX Laboratories integrated its ezyVet acquisition, thus growing its capabilities in cloud-based software. The company also grew its segments of recurring software and diagnostics imaging services.
Additionally, the company remains well-positioned to build on the Q3 success to drive advancement of the standard of healthcare for a companion animal.
For the full year, IDEXX Laboratories is projecting revenue of between $3.19 billion and $3.2 billion, representing 17.5% to 18% growth. Organic growth is projected to range between 15.5% and 16%. EPS, on the other hand, is expected to range between $8.30 and $8.38.
In August, Credit Suisse analyst Katie Tryhane reiterated a Buy rating on the stock and raised the price target to $770 from $735, implying 22.74% upside potential to current levels. The analyst remains confident about the company’s growth trajectory and leadership positioning.
Consensus among analysts is a Moderate Buy based on 1 Buy and 1 Hold. The average IDEXX Laboratories price target of $690 implies a 9.99% upside potential to current levels.