IDEXX Laboratories Faces Challenges Despite Strong Market Position
Westbrook, Maine-based IDEXX Laboratories, Inc. (IDXX) is known for improving the health of pets, people, and livestock. It develops and distributes products and services for the companion animal veterinary, livestock and poultry, water testing, and dairy markets. With a market cap of $35.8 billion, IDEXX is a leading player in pet healthcare innovation.
Large-Cap Stock Status and Global Reach
As a company valued at over $10 billion, IDEXX Laboratories qualifies as a “large-cap stock.” Its strong presence in the pet healthcare market justifies this classification, with operations in more than 70 locations around the world and services to customers in over 175 countries.
Recent Stock Decline Amid Underperformance
Recently, however, IDEXX has faced difficulties, with shares dropping 25.1% from a 52-week high of $583.39 on March 1. In the past three months, IDXX stock has fallen over 12%, significantly underperforming the S&P 500 Index’s gains of 8.1% during the same period.
Long-Term Performance Lags Behind Competitors
IDEXX’s long-term performance paints an even bleaker picture. Year-to-date, the stock has dropped over 21.2%, and in the past year, it has declined 19.8%, while the S&P 500 has gained 26.9% in 2024 and 30.3% over the last year.
IDEXX has consistently traded below its 200-day and 50-day moving averages, indicating a bearish trend that began in late June, despite some fluctuations.
Disappointing Q3 Results Impact Investor Confidence
A recent plunge of 9.8% in stock prices came after IDEXX released disappointing Q3 results on October 31. While the company reported a 6.6% increase in revenues year-over-year, reaching $975.5 million, it fell short of Wall Street expectations. A decrease in visits by pet owners and lower demand at U.S. veterinary clinics prompted IDEXX to cut its full-year revenue growth guidance from 6.2%–7.8% to 5.5%–6.2%, unsettling investors. However, earnings per share (EPS) grew by 10.7% year-over-year to $2.80, exceeding analysts’ expectations by 4.1%.
Although IDEXX has struggled, it has outperformed Neogen Corporation (NEOG), which has seen a 37.9% decline year-to-date and a roughly 30% drop in the past year.
Analysts Maintain Optimism for Future Growth
Despite these challenges, analysts are still optimistic about IDEXX’s future. It holds a consensus “Moderate Buy” rating among 11 analysts, with a mean price target of $494.60, representing a robust 13.1% premium over current price levels.
On the date of publication, Aditya Sarawgi did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information, please view the Barchart Disclosure Policy here.
The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.
