Idexx Laboratories ( IDXX ) clearly exceeded Wall Street's expectations for the fourth quarter on Monday. Idexx shares reached a four-month high.
Idexx manufactures diagnostic products for veterinary practices. In the December quarter, the company earned 2.62 dollars per share on sales of 954 million dollars. On a purely balance sheet basis, profit rose by 13 percent, while turnover increased by 6 percent. Both figures exceeded forecasts, said Ryan Daniels, analyst at William Blair, in a report to clients.
Daniels acknowledged that a decline in vet visits weighed on Idexx shares. However, higher prices and an increase in the number of new pets - thanks in part to the "pandemic puppy boom" - should help offset some of the slump in vet visits, he said.
"We believe the aging pet population will begin as early as this year and peak in 2030 or 2031, creating a growing need for veterinary care (especially diagnostics), which will provide a solid long-term tailwind for the industry," he said.
On the stock market today, shares of Idexx rose more than 11% to 470.29. It was the first time since September that shares rose above their 200-day moving average.
Mixed forecast from Idexx Laboratories
Notably, recurring revenue from pet diagnostics rose 6% in the three months to December 31. This was in line with Idexx Laboratories' forecast of organic growth of 5.8 % to 6.4 %.
For the year, Idexx forecast sales of just under 4.06 to 4.17 billion dollars. The midpoint of the forecast was below analysts' projection of $4.14 billion, William Blair's Daniels said. However, the midpoint of the company's profit forecast exceeded expectations. Idexx expects earnings of 11.74 to 12.24 dollars per share.
Daniels maintained his Outperform rating on Idexx shares.
"Overall, we still view the veterinary market as a safe investment area due to its resilience to recessions, strong pricing power, lack of political risk and favorable demographics," he said.
https://www.investors.com/news/technology/idexx-laboratories-earnings-q4-2024-idexx-stock/
