IDEXX Laboratories, Inc. (IDXX): A Bull Case Theory

We came across a bullish thesis on IDEXX Laboratories, Inc. on Stock Analysis Compilation’s Substack. In this article, we will summarize the bulls’ thesis on IDXX. IDEXX Laboratories, Inc.'s share was trading at $549.97 as of July 24^th. IDXX’s trailing and forward P/E were 49.97 and 44.84, respectively according to Yahoo Finance.

IDEXX Laboratories, a global leader in pet diagnostics, offers durable growth potential backed by dominant market share, a highly recurring razor-and-blades business model, and defensive characteristics, with valuation now appealing as pandemic-driven demand normalizes. The company delivers in-clinic diagnostics through instrument sales and recurring consumables, complemented by reference lab services, imaging, and veterinary practice management software, executing a “surround the customer” strategy that deepens its integration with veterinary practices.

Long admired for its sustainable competitive advantages, IDEXX benefits from structural tailwinds, including rising pet ownership and the “humanization of pets,” while consistently expanding its addressable market through innovation in diagnostic testing and adjacent revenue streams. These factors support expectations for many years of double-digit organic revenue growth with minimal competitive threats.

Historically, the company’s premium valuation had been a barrier to entry; however, a temporary slowdown—driven by fewer vet visits as COVID-era pets remain relatively young—has provided a more attractive entry point. The long-term outlook remains intact, as these pets are expected to require increased veterinary care as they age, fueling accelerating demand.

IDEXX’s recurring revenue base, scale advantages, and loyal shareholder following imbue it with safety-like characteristics, while its proven execution underpins confidence in sustained mid-to-high teens EPS growth, at least in line with portfolio averages. With a uniquely defensive profile, multiple growth levers, and valuation support following transitory headwinds, IDEXX offers a compelling opportunity for long-term investors seeking a resilient, high-quality compounder poised to benefit from continued innovation, expanding market share, and enduring pet care trends.

Previously, we covered a bullish thesis on IDEXX Laboratories, Inc. (IDXX) by Hidden Market Gems in March 2025, highlighting its dominant veterinary diagnostics position, recurring revenues, and growth from pet humanization. The stock has appreciated about 29% since, as valuation concerns eased. The thesis holds, with Stock Analysis Compilation sharing an identical view but emphasizing the valuation reset as an entry catalyst.

IDEXX Laboratories, Inc. is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 51 hedge fund portfolios held IDXX at the end of the first quarter which was 58 in the previous quarter. While we acknowledge the potential of IDXX as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

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Disclosure: None.