Idexx Laboratories easily beat second-quarter expectations Monday as the animal-health player continued benefiting from the "puppy boom" of 2020.
Maine-based Idexx sells lab equipment for veterinary offices. During the three months June 30, Idexx notched $1.11 billion in sales, topping forecasts for $1.07 billion, according to FactSet. The company also earned an adjusted $3.63 per share, crushing calls for $3.30.
William Blair analyst Ryan Daniels acknowledged recent slowness in the veterinary space. But Idexx Laboratories is benefiting from new products in the cancer space. It also launched the inVue Dx analyzer in late 2024. The inVue Dx analyzes blood and samples taken from animals' ears.
Idexx stock 27.5% higher, closing at 682.78. Shares hit a recent low at 356.14 in early April. Since then, Idexx Laboratories shares have climbed almost 92%.
How Idexx Is Navigating Investors' Questions
There's a lot to drive Idexx right now, William Blair's Daniels said.
Investors have questioned whether a slowdown in vet visits and price cuts could impact Idexx's near-term growth profile. But the second-quarter results should bolster confidence the company can still reach expectations, even in the challenging environment, he said in a client note.
"Combined with what we expect is a relatively resilient pet health market and an aging pet population from the 2020 puppy boom (which should soon require more care), we maintain our Outperform rating on shares and expect future EPS growth to drive shares higher," he said.
Idexx Laboratories also hiked its outlook for the year and now expects $4.205 billion to $4.28 billion in sales, an increase of $90 million at the midpoint. This reflects solid recurring revenue from the companion animal diagnostics space, the company said in a news release.
The company is also seeing higher placements of its inVue Dx product and expects a $70 million benefit from foreign exchange rates vs. prior estimates.
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