Idexx Laboratories handily beat Wall Street's fourth-quarter expectations Monday. Idexx stock gapped up to a four-month high.
Idexx makes diagnostic products for veterinary offices. During the December quarter, the company earned $2.62 per share on $954 million in sales. Earnings jumped 13% on a strict, as-reported basis while sales cruised 6% higher. Both topped forecasts, William Blair analyst Ryan Daniels said in a report to clients.
Daniels acknowledged a slowdown in vet visits has weighed on Idexx stock. But higher prices and growth in new pet ownership — in part thanks to the "pandemic puppy boom" — should partially help offset the vet visit slump, he said.
"Starting as early as this year and peaking in 2030 or 2031, we believe an aging pet population will start to require an increasing level of veterinary care (especially diagnostics), and thus present a solid long-term tailwind for the industry," he said.
On the stock market today, Idexx stock jumped 11.1%, closing at 469.04. Shares rose above their 200-day moving average for the first time since September.
Idexx Laboratories' Mixed Guidance
Notably, recurring revenue from pet diagnostics increased 6% during the three months ended Dec. 31. That was in line with Idexx Laboratories' forecast for 5.8% to 6.4% organic growth.
For the year, Idexx guided to nearly $4.06 billion to $4.17 billion in sales. The midpoint of the guidance missed analysts' call for $4.14 billion, William Blair's Daniels said. But the middle of the company's earnings outlook topped expectations. Idexx expects to earn $11.74 to $12.24 a share.
Daniels kept his outperform rating on Idexx stock.
"Overall, we still view the veterinary health care market as a safe haven investment area due to its resilience during recessions, strong pricing power, lack of political risk, and favorable demographic trends," he said.
