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IDEXX Well-Poised on Strong Fundamentals, Global Growth

On Jun 27, we issued an updated research report on IDEXX Laboratories, Inc. IDXX, a leading molecular diagnostic company. The stock currently has a Zacks Rank #2 (Buy).

For most part of the last three months, IDEXX Laboratories was trading above the Zacks categorized Medical - Instruments industry. Although of late, the shares have dipped to unsettle the stock into underperformance compared with the broader industry, we still believe this setback is short-lived and the stock will soon tide over riding on its strong fundamentals. Per the last share price movement, the stock has gained 5.6% in the period, lower than the broader industry’s 9% increase.

It is encouraging to note that IDEXX continues to demonstrate solid global growth on potent international expansion. International revenues in the first quarter of 2017 grew low double digits, driven by a 17% organic rise in CAG Diagnostics recurring revenues. This indicated continued consumable revenue gains supported by a strong Catalyst instrument customer base and average testing utilization.

IDEXX derives the lion’s share of revenues from its Companion Animal Group segment (CAG). In first quarter, the CAG revenues rose double digits on a year-over-year basis, supported by CAG Diagnostics recurring organic as well as CAG instrument revenue growth.

There is also a reason to cheer for the company’s recent inclusion in the NASDAQ-100 Index, the NASDAQ-100 Equal Weighted Index and the NASDAQ-100 Ex Technology Index. It has also been listed under the coveted S&P 500 that proves its stable performance in the past few years.

On the contrary, foreign exchange headwinds continue to prick as a major dampener for the company’s international accomplishments. A competitive landscape in the overseas market weighs on IDEXX. Besides, a last-three-months’ comparative study of the company’s forward P/E (F12M basis) multiple reflected that the stock has been quite overvalued compared with the broader industry.

Key Picks

Few top-ranked medical stocks are Align Technology, Inc. ALGN, Inogen, Inc. INGN and Accelerate Diagnostics, Inc. AXDX. Notably, Inogen sports a Zacks Rank #1(Strong Buy), while Align Technology and Accelerate Diagnostics carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Align Technology has an expected long-term adjusted earnings growth of almost 24.1%. The stock has almost surged 30.7% over the last three months.

Inogen has a long-term expected earnings growth rate of 17.5%. The stock has rallied around 19.7% over the last three months.

Accelerate Diagnostics has an expected long-term adjusted earnings growth of 30%. The stock has roughly burgeoned 17.9% over the last three months.

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IDEXX Laboratories, Inc. (IDXX): Free Stock Analysis Report
Inogen, Inc (INGN): Free Stock Analysis Report
Accelerate Diagnostics, Inc. (AXDX): Free Stock Analysis Report
Align Technology, Inc. (ALGN): Free Stock Analysis Report
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