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

We came across a bullish thesis on IDEXX Laboratories, Inc. on MTC’s Substack. In this article, we will summarize the bulls’ thesis on IDXX. IDEXX Laboratories, Inc.'s share was trading at $643.59 as of February 5th. IDXX’s trailing and forward P/E were 49.20 and 45.25 respectively according to Yahoo Finance.

IDEXX Laboratories, Inc. develops, manufactures, and distributes products for the companion animal veterinary, livestock and poultry, dairy, and water testing industries in the United States and internationally. IDXX delivered a strong finish to 2025, surpassing analyst expectations with fourth-quarter revenue of $1.09 billion, up 14% reported and 12% organically, and EPS of $3.08, exceeding the consensus of $2.93. Full-year revenue reached $4.30 billion, up 10% both reported and organically, with EPS of $13.08, a 14% increase over 2024, while operating margins expanded to 31.6% through revenue growth and productivity improvements.

The Companion Animal Group (CAG) remained the primary growth engine, generating $998 million in Q4 revenue with 13% organic growth, driven by recurring diagnostic revenue growth, volume gains, and 4% average global net price improvement. IDEXX set a quarterly record for premium instrument placements, with over 1,900 inVue Dx instruments added, contributing to 69% organic growth in CAG Diagnostic instrument revenues and expanding the global installed base by 12% for the year. Margins strengthened across the board, with Q4 gross margin rising to 60.3% and operating margin reaching 29%, supported by volume gains, productivity initiatives, and price realization.

The company generated $1.1 billion in free cash flow for 2025, fully converting net income to cash, while returning $1.2 billion to shareholders through share repurchases. Looking ahead, IDEXX expects 2026 revenue of $4.63–$4.72 billion, reflecting 7%–9% organic growth, and EPS of $14.29–$14.80, supported by continued margin expansion. Other segments performed solidly, with Water up 10% organically and Livestock, Poultry & Dairy growing 4% organically. Strategic investments in innovation, including the inVue Dx platform and CancerDx test, are poised to drive future growth, while the company maintains disciplined commercial and operational execution, positioning IDEXX for continued profitable expansion.

Previously, we covered a bullish thesis on IDEXX Laboratories, Inc. (IDXX) by Hidden Market Gems in March 2025, which highlighted the company’s leadership in veterinary diagnostics, recurring revenue model, strong margins, innovation in AI-driven and cloud-based solutions, and growth opportunities across Companion Animal, livestock, and water markets. IDXX’s stock price has appreciated by approximately 50.83% since our coverage. MTC shares a similar perspective but emphasizes IDEXX’s record instrument placements, strong 2025 financial results, and robust free cash flow as near-term catalysts.

IDEXX Laboratories, Inc. is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 55 hedge fund portfolios held IDXX at the end of the third quarter which was 48 in the previous quarter. While we acknowledge the risk and potential of IDXX as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than IDXX and that has 10,000% upside potential, check out our report about this cheapest AI stock.

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Disclosure: None.