Is IDEXX Laboratories Stock the Right Pick for Your Portfolio Now?

IDEXX Laboratories, Inc. IDXX is well-poised to grow in the upcoming quarters due to the strong momentum in its CAG (Companion Animal Group) Diagnostics business. The company is also growing its global commercial capability to sustain strong CAG Diagnostics recurring revenue growth. Its software solutions are also facilitating growth by enhancing clinic workflows and promoting greater utilization of diagnostics. However, unfavorable solvency and adverse currency impacts, hurting financial results, raise concerns for IDEXX’s operations.

In the past year, this Zacks Rank #2 (Buy) stock has surged 59.3% against the industry’s 3.9% fall and the S&P 500 composite’s 16.6% growth.

The renowned medical device company has a market capitalization of $57.2 billion. IDEXX’s earnings surpassed estimates in each of the trailing four quarters, delivering an average surprise of 7.1%.

Let’s delve deeper.

IDXX’s Tailwinds

CAG Continues to Perform Well: Diagnostics has remained one of the fastest-growing revenue streams within veterinary clinics, and IDEXX’s focus on innovation in CAG has resulted in a highly compelling portfolio of products and services. Over the past few quarters, CAG Diagnostics’ recurring revenue growth has consistently remained above sector growth levels. In the third quarter of 2025, CAG Diagnostics’ recurring revenues grew more than 10% organically, reflecting more than 8% gains in the United States and double-digit growth in international regions. IDEXX VetLab consumables revenues grew from higher test volumes and realized pricing.

Volume gains came from increased testing across major regions, including the benefits from a 10% uptick in the company’s active premium instruments installed base. Veterinary software and diagnostic imaging revenues increased 10% organically. Within it, veterinary software gained from strong double-digit growth in cloud-based PIMS installations and adoption of related recurring services.

Strong Global Performance: Internationally, the company had delivered double-digit installed base growth for the 11th consecutive quarter in the third quarter of 2025, with a step-up in the growth of CAG Diagnostics recurring revenues across major regions. IDEXX’s commercial strategies are globally tailored to regional dynamics, supported by strong Reference Laboratory networks and backed by an innovation approach that ensures high product/market fit, such as with ProCyte One hematology analyzer and SNAP Leishmania.

Expanding diagnostic frequency in international regions remains an important contributor to growth, elevating the standard of care and expanding the sector opportunity. The company is investing in commercial footprint where customer readiness and growth potential are strongest and remains on track to expand in three international countries by the start of 2026. These are high-return investments, which are expected to drive broader adoption of IDEXX solutions. In addition, it plans to bring the Cancer Dx panel to international markets starting in the first quarter, extending its reach and accelerating the global leadership in veterinary cancer diagnostics.

Cloud-Based Software in Trend: IDEXX’s software ecosystem continues to be an essential component of its value proposition. The company’s solutions are boosting innovation-driven growth by improving clinic workflows and supporting greater utilization of diagnostics. In the third quarter of 2025, IDEXX’s cloud-native PIMS platforms, such as ezyVet and Neo, delivered double-digit installed base growth, surpassing a milestone, now with more than 10,000 locations, and strong adoption among both independent practices and enterprise customers with multi-location groups.

IDEXX’s pet owner engagement application, Vello, continued to expand, with active clinics growing more than 20% sequentially and more than half of PIMS bookings in the quarter adding a Vello subscription. The integration of Vello with IDEXX’s diagnostics and PIMS ecosystem further amplifies its value, making it an increasingly important part of IDEXX's long-term growth engine.

What Ails IDEXX?

Solvency Position: IDEXX closed the third quarter of 2025 with cash and cash equivalents of $208 million and $605 million in short-term debt. Long-term debt (net of the current portion) dropped 16.7% from the previous quarter to $375 million, but was higher than the cash levels. The debt-to-capital ratio came to 25.2%.

Foreign Exchange Headwind: A majority of IDEXX's consolidated revenues are from product sales in international markets, with approximately 35.3% of total second-quarter revenues derived from products manufactured in the United States and sold internationally in local currencies. The strengthening of the U.S. dollar has negatively affected the company’s revenues from these international transactions. In the third quarter of 2025, the change in foreign currency exchange rates decreased the gross profit margin by approximately 10 basis points.

IDXX Stock Estimate Trend

The Zacks Consensus Estimate for IDEXX’s 2025 EPS of $12.93 indicates 21.2% growth over 2024.

The Zacks Consensus Estimate for the company’s 2025 revenues is pegged at $4.28 billion. This suggests a 9.9% rise from the year-ago reported number.

Other Key Picks

Some other top-ranked stocks in the broader medical space are Phibro Animal Health PAHC, Boston Scientific BSX and Envista NVST.

Phibro Animal Health has an earnings yield of 6.9% compared with the industry’s 2.8% yield. Shares of the company have surged 88.8% in the past year against the industry’s 10.1% decline. PAHC’s earnings outpaced estimates in each of the trailing four quarters, the average surprise being 20.8%.

PAHC carries a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Boston Scientific, carrying a Zacks Rank #2, has an estimated long-term earnings growth rate of 16.4% compared with the industry’s 13.9% growth. Its earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, with the average surprise being 7.4%. BSX shares have declined 9.1% compared with the industry’s 10.1% fall in the past year.

Envista, currently carrying a Zacks Rank #2, has an earnings yield of 5.4% compared with the industry’s 2.8% yield. Shares of the company have jumped 15.6% against the industry’s 10.1% decline. NVST’s earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 12.8%.

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This article originally published on Zacks Investment Research (zacks.com).

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