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What Lies Ahead of IDEXX Laboratories (IDXX) in Q1 Earnings?

IDEXX Laboratories, Inc. IDXX is set to release first-quarter 2024 results on May 1 before the opening bell.

The company posted adjusted earnings per share (EPS) of $2.32 in the last reported quarter, which surpassed the Zacks Consensus Estimate by 9.43%. IDEXX Laboratories beat earnings estimates in each of the trailing four quarters, the average surprise being 8.30%.

Let’s look at how things have shaped up before this announcement.

Factors at Play

In the first quarter of 2024, IDEXX's Companion Animal Group (“CAG”)Diagnostics recurring revenues are expected to maintain the trend of robust organic gains, contributing significantly to the company's overall revenue growth. The growth is likely to have been supported by an improvement in the average global net price, including modest net price gains in the United States. Additionally, CAG Diagnostics’ recurring revenue growth may have continued to remain solidly above sector growth levels in the to-be-reported quarter.

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We expect that volume growth in the United States may have been driven by the continued benefits of IDEXX execution drivers, including new business gains, high customer retention levels and sustained diagnostic frequency levels per visit. The company’s international performance is also likely to have been fueled by strong execution, demonstrated through continued growth in premium instrument placements. This may have also led to a significant increase in IDEXX’s international premium instrument installed base in the first quarter of 2024, contributing to its revenue growth.

Consistent with the past quarters, IDEXX VetLab consumable revenues are likely to have experienced solid organic growth, driven by robust increases in both the United States and international markets. The consumable gains may have been supported by the company’s growing global premium install base, particularly with strong increases across the Catalyst, Premium Hematology and SediVue platforms. This is also expected to benefit IDEXX’s top line in the first quarter of 2024. Also, IDEXX may have placed a higher number of premium instruments in the to-be-reported quarter, driven by strong gains in SediVue placements and the ongoing expansion of ProCyte One.

IDEXX Laboratories, Inc. Price and EPS Surprise

IDEXX Laboratories, Inc. Price and EPS Surprise
IDEXX Laboratories, Inc. Price and EPS Surprise

IDEXX Laboratories, Inc. price-eps-surprise | IDEXX Laboratories, Inc. Quote

The Rapid Assay revenues are also likely to have registered organic growth in the first quarter of 2024, supported by the benefits of net price increases and solid volume gains in the United States. Furthermore, robust gains in the United States and sustained solid organic revenue growth in international regions may have driven Global lab organic revenues. Increases in CAG Veterinary Software and Diagnostic Imaging Services organic revenues are expected to have been driven by robust recurring revenues and ongoing momentum in cloud-based software placements, thus benefiting the company’s top line in the to-be-reported quarter.

Going by the Zacks Consensus Estimate, CAG business revenues are expected to increase 7.6% year over year in the first quarter of 2024.

The Water segment is likely to have achieved strong organic revenues in the first quarter of 2024 due to continued solid gains in the United States and Europe. In 2023, the business delivered incremental revenues, primarily due to the benefit of price increases and higher testing volumes in certain international regions, and also benefited from the 2022 acquisition of TECTA-PDS. This favorable trend is expected to be reflected in the company’s revenues in the to-be-reported quarter.

The Zacks Consensus Estimate suggests an improvement of 7.9% in the Water segment’s revenues in the first quarter of 2024.

We expect the situation in the Livestock, Poultry and Dairy (“LPD”) line of business to have improved since the fourth quarter of 2023, potentially delivering favorable organic revenues in the to-be-reported quarter. This improvement may have been achieved through solid gains in the United States, Europe and Latin America, which could have offset the impact of declining herd health screening revenues related to reduced China import testing.

The Zacks Consensus Estimate indicates a 1.6% year-over-year improvement in LPD revenues for the first quarter of 2024.

Q1 Estimates

The Zacks Consensus Estimate for IDEXX’s first-quarter 2024 revenues is pegged at $966.4 million, which suggests an increase of 7.4% from the year-ago reported figure.

The Zacks Consensus Estimate for its first-quarter 2024 EPS of $2.68 indicates a 5.1% rise from the year-ago reported figure.

What Our Model Suggests

Per our proven model, a stock with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold), along with a positive Earnings ESP, has a higher chance of beating estimates. However, that is not the case here, as you can see below:

Earnings ESP: IDEXX Laboratories has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: The company currently carries a Zacks Rank #2.

Stocks Worth a Look

Here are some medical stocks worth considering as these have the right combination of elements to post an earnings beat this quarter:

TransMedics Group TMDX has an Earnings ESP of +240.00% and a Zacks Rank #1. The company is expected to release first-quarter 2024 results on May 6. You can see the complete list of today’s Zacks #1 Rank stocks here.

TransMedics has an expected earnings growth rate of 81.8% for 2024. TMDX surpassed earnings in each of the trailing four quarters, the average being 107.83%.

Inspire Medical Systems INSP has an Earnings ESP of +18.04% and a Zacks Rank #1. The company is set to release first-quarter 2024 results on May 7.

INSP has an expected long-term earnings growth rate of 51.4% compared to the S&P 500’s 17.1%. The company surpassed earnings in each of the trailing four quarters, the average being 353.55%.

Insulet PODD currently has an Earnings ESP of +11.11% and a Zacks Rank #2. The company is set to release its first-quarter 2024 results on May 9.

PODD has an expected long-term earnings growth rate of 18.1% compared to the industry’s 11.4%. The company surpassed earnings in each of the trailing four quarters, the average being 100.09%.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.

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IDEXX Laboratories, Inc. (IDXX) : Free Stock Analysis Report

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