IDEXX Laboratories Inc (IDXX, Financial) has recently been in the spotlight, drawing interest from investors and financial analysts due to its robust financial stance. With shares currently priced at $507.03, IDEXX Laboratories Inc has witnessed a surge of 2.83% over a period, marked against a three-month change of 7.11%. A thorough analysis, underlined by the GuruFocus Score Rating, suggests that IDEXX Laboratories Inc is well-positioned for substantial growth in the near future.
Understanding the GF Score
The GF Score is a stock performance ranking system developed by GuruFocus using five aspects of valuation, which has been found to be closely correlated to the long-term performances of stocks by backtesting from 2006 to 2021. The stocks with a higher GF Score generally generate higher returns than those with a lower GF Score. Therefore, when picking stocks, investors should invest in companies with high GF Scores. The GF Score ranges from 0 to 100, with 100 as the highest rank.
Here are the key components of IDEXX Laboratories Inc's GF Score:
- 1. Financial strength rank: 7/10
- 2. Profitability rank: 10/10
- 3. Growth rank: 10/10
- 4. GF Value rank: 6/10
- 5. Momentum rank: 9/10
Each one of these components is ranked and the ranks also have positive correlation with the long term performances of stocks. The GF score is calculated using the five key aspects of analysis. Through backtesting, we know that each of these key aspects has a different impact on the stock price performance. Thus, they are weighted differently when calculating the total score. With a high profitability rank and a slightly lower GF Value rank, GuruFocus assigned IDEXX Laboratories Inc the GF Score of 97 out of 100, which signals the highest outperformance potential.
Overview of IDEXX Laboratories Inc's Business
IDEXX Laboratories Inc, with a market cap of $42.09 billion, primarily develops, manufactures, and distributes diagnostic products, equipment, and services for pets and livestock. Its key product lines include single-use canine and feline test kits that veterinarians can employ in the office, benchtop chemistry and hematology analyzers for test-panel analysis on-site, reference lab services, and tests to detect and manage disease in livestock. The firm also offers vet practice management software and consulting services to animal hospitals. Idexx gets close to 40% of its revenue from outside the United States. The company's sales stand at $3.51 billion with an operating margin of 29.82%.
Financial Strength Analysis
According to the Financial Strength rating, IDEXX Laboratories Inc's robust balance sheet exhibits resilience against financial volatility, reflecting prudent management of capital structure. The Interest Coverage ratio for IDEXX Laboratories Inc stands impressively at 21.73, underscoring its strong capability to cover its interest obligations. This robust financial position resonates with the wisdom of legendary investor Benjamin Graham, who favored companies with an interest coverage ratio of at least 5. With an Altman Z-Score of 18.34, IDEXX Laboratories Inc exhibits a strong defense against financial distress, highlighting its robust financial stability. With a favorable Debt-to-Revenue ratio of 0.33, IDEXX Laboratories Inc's strategic handling of debt solidifies its financial health.
Profitability Rank Breakdown
The Profitability Rank shows IDEXX Laboratories Inc's impressive standing among its peers in generating profit. IDEXX Laboratories Inc Operating Margin has increased (20.23%) over the past five years, as shown by the following data: 2018: 22.20; 2019: 22.97; 2020: 25.66; 2021: 28.99; 2022: 26.69. Furthermore, IDEXX Laboratories Inc's Gross Margin has seen a consistent rise over the past five years, as evidenced by the data: 2018: 56.10; 2019: 56.73; 2020: 58.04; 2021: 58.76; 2022: 59.52. This trend underscores the company's growing proficiency in transforming revenue into profit. The Piotroski F-Score confirms IDEXX Laboratories Inc's solid financial situation based on Joseph Piotroski's nine-point scale, which measures a company's profitability, funding and operating efficiency. IDEXX Laboratories Inc's strong Predictability Rank of 5.0 stars out of five underscores its consistent operational performance, providing investors with increased confidence.
Growth Rank Breakdown
Ranked highly in Growth, IDEXX Laboratories Inc demonstrates a strong commitment to expanding its business. The company's 3-Year Revenue Growth Rate is 13.1%, which outperforms better than 56.44% of 202 companies in the Medical Diagnostics & Research industry. Moreover, IDEXX Laboratories Inc has seen a robust increase in its earnings before interest, taxes, depreciation, and amortization (EBITDA) over the past few years. Specifically, the three-year growth rate stands at 17.8, and the rate over the past five years is 18.2. This trend accentuates the company's continued capability to drive growth.
Conclusion
Given IDEXX Laboratories Inc's strong financial strength, profitability, and growth metrics, the GuruFocus Score Rating highlights the firm's unparalleled position for potential outperformance. This analysis underscores the company's robust financial health, consistent profitability, and impressive growth trajectory, making it a compelling investment opportunity. GuruFocus Premium members can find more companies with strong GF Scores using the following screener link: GF Score Screen
