IDXX

Idexx Laboratories, Inc.

Consumer


Presented:09/26/2024
Price:$509.03
Cap:$41.90B
Current Price:$473.92
Cap:$39.01B

Presented

Date09/26/2024
Price$509.03
Market Cap$41.90B
Ent Value$41.30B
P/E Ratio50.46x
Book Value$19.16
Div Yield0%
Shares O/S82.31M
Ave Daily Vol469,336
Short Int3.71%

Current

Price$473.92
Market Cap$39.01B
IDEXX Laboratories, Inc. engages in the development, manufacture, and distribution of products and services for the animal veterinary, livestock and poultry, dairy, and water testing markets. It operates through the following segments: Companion Animal Group (CAG), Water Quality Products (Water), Livestock, Poultry, and Dairy (LPD), and Other. The CAG segment provides diagnostic and information management-based products and services for the companion animal veterinary industry, including in-clinic diagnostic solutions, outside reference laboratory services, and veterinary software and services. The Water segment offers innovative testing solutions for easy, rapid, and accurate detection and quantification of various microbiological parameters in water. The LPD segment develops diagnostic tests, services, and related instrumentation that are used to manage the health status of livestock and poultry, to improve producer efficiency, and to ensure the quality and safety of milk and food. The Other segment is composed of products for the human point-of-care medical diagnostics market with its out-licensing arrangements. The company was founded by David Evans Shaw on December 19, 1983, and is headquartered in Westbrook, ME.

Publicly traded companies mentioned herein: IDEXX Laboratories Inc (IDXX), Zoetis Inc (ZTS)

Highlights

The presenter is short shares of IDEXX Laboratories (IDXX), a leading pet diagnostics company with a razor-razorblade model. He argues that the company’s recurring revenue growth is unlikely to return to the low-teen% levels due to three key factors: decelerating veterinary visit growth, smaller increases in per-test costs, and a reduction of IDEXX’s leading position in the market. Given these challenges, the presenter contends that IDEXX's current valuation of 45x-50x earnings is excessive and proposes a more appropriate multiple in the 30x-35x range as he expects the company to miss expectations going forward.

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Idea Discussion

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