IDEXX Laboratories Stock Rallies 52.9% YTD: What's Behind the Drive?

IDEXX Laboratories IDXX has shown remarkable momentum so far this year, climbing 52.9%. The stock has comfortably surpassed the industry’s 12.9% fall and the S&P 500 Composite’s 13.8% gain.Carrying a Zacks Rank #3 (Hold) at present, the pet healthcare innovator’s robust strategic execution is highlighted by new business gains, high customer retention levels and solid net price realization. Its software solutions are facilitating growth by enhancing clinic workflows and promoting greater utilization of diagnostics.Headquartered in Westbrook, ME, IDEXX Laboratories offers products and services mainly for the companion animal veterinary, livestock and poultry, water testing and dairy sectors. Through its Companion Animal Group (“CAG”) Diagnostics segment, the company provides diagnostic capabilities that meet veterinarians’ diverse needs through a variety of modalities, including in-clinic diagnostic solutions and outside reference laboratory services. IDEXX has a sales footprint across the United States and in key regions globally, including Africa, Asia Pacific, Canada, Europe and Latin America.What’s Behind IDXX Stock’s Price Surge?The rally in the company’s share price can be linked to the strong momentum in the CAG Diagnostics business. Over the past few quarters, CAG Diagnostics’ recurring revenue growth has consistently remained above sector growth levels. The company’s long-term success in CAG recurring diagnostic products and services depends upon growing volumes of existing customers by increasing their utilization of existing and new test offerings, acquiring new customers, maintaining high customer loyalty and retention, and realizing modest annual price increases.In the second quarter of 2025, worldwide CAG Diagnostics recurring revenues increased 7.5% organically, supported by an average net price improvement of approximately 4% and benefits from CAG Diagnostics instrument revenues increasing 62% on an organic basis, aided by inVue Dx placements.  Internationally, growth was supported by new business expansion, which was reflected in a double-digit year-over-year improvement in the global premium instrument installed base. IDEXX also generated substantial revenues and margins from the sale of consumables used in IDEXX VetLab instruments.Image Source: Zacks Investment ResearchIn addition, the company’s cloud-based products, including ezyVet, Animana, Cornerstone, IDEXX NEO, DVMAX PIMS (practice information management systems) and Web PACS (picture archiving and communication system imaging software), continue to be in high demand. The newly introduced Vello software solution experienced continued momentum with double-digit sequential growth in active users. Its software solutions are driving innovation-driven growth by improving clinic workflows and supporting greater utilization of diagnostics. IDEXX is also building on the robust features of its customer engagement solution by integrating Greenline Pet, a digital platform acquired earlier in 2024.Through strategic investments, the company continues to strengthen its future growth prospects by delivering high-touch commercial engagement in the fastest-growing regions while maintaining strong business performance. IDEXX’s expanded global commercial capability is yielding strong results overseas, with a notable 11% organic rise in international CAG Diagnostics’ recurring revenues in the second quarter of 2025.Concerns for IDEXXGlobal macroeconomic conditions, including growing geopolitical complexities, supply-chain disruptions leading to unit cost increases of raw materials, shortages of healthcare staff, fluctuations in foreign currency exchange rates and volatility in capital markets, could continue to adversely affect IDEXX’s results of operations. Headwinds from currency fluctuations also remain a concern.A Glance at IDXX’s EstimatesThe Zacks Consensus Estimate for IDEXX’s 2025 and 2026 earnings per share (EPS) is expected to increase 17.6% and 12.1% year over year, respectively, to $12.55 and $14.07. In the past 60 days, the Zacks Consensus Estimate for the company's fiscal 2025 EPS has risen 2.8%. Revenues for 2025 are projected to grow 8.6% to $4.23 billion, while those for 2026 are expected to reach $4.56 billion, implying a 7.8% increase.Key PicksSome better-ranked stocks in the broader medical space are Masimo MASI, Boston Scientific BSX and Cardinal Health CAH.Masimo has an earnings yield of 3.8% compared to the industry’s -4.5% yield. Its earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, with the average surprise being 13.8%. MASI shares have rallied 6.1% against the industry’s 19.5% drop in the past year.MASI sports a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.Boston Scientific, carrying a Zacks Rank #2 (Buy), has an earnings yield of 3.1% compared with the industry’s 0.5% growth. Shares of the company have surged 17.2% compared with the industry’s 1.9% fall. BSX’s earnings outpaced estimates in each of the trailing four quarters, with the average surprise being 8.1%.Cardinal Health, carrying a Zacks Rank #2, has an estimated long-term earnings growth rate of 12.5% compared with the industry’s 9.7% growth. Shares of the company have rallied 39.1%, compared with the industry’s flat growth. CAH’s earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 9.2%.5 Stocks Set to DoubleEach was handpicked by a Zacks expert as the favorite stock to gain +100% or more in the months ahead. They includeStock #1: A Disruptive Force with Notable Growth and ResilienceStock #2: Bullish Signs Signaling to Buy the DipStock #3: One of the Most Compelling Investments in the MarketStock #4: Leader In a Red-Hot Industry Poised for GrowthStock #5: Modern Omni-Channel Platform Coiled to SpringMost of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor. While not all picks can be winners, previous recommendations have soared +171%, +209% and +232%.Download Atomic Opportunity: Nuclear Energy's Comeback free today.Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Boston Scientific Corporation (BSX): Free Stock Analysis Report Cardinal Health, Inc. (CAH): Free Stock Analysis Report Masimo Corporation (MASI): Free Stock Analysis Report IDEXX Laboratories, Inc. (IDXX): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks