Nicholas Jansen, Analyst with Raymond James & Associates, says consumers have been spending more on pet care over the last two years. Against that backdrop of an improving market, he says IDEXX Laboratories, Inc. (IDXX) has grown revenue with new product introductions.
“IDEXX is the number one player in diagnostics globally for veterinary care, and they have launched several innovative products over the last few years which has resulted in their revenue growth accelerating from, let’s say, the mid-to-high single digits probably when the last time we spoke, to more recently to the low double digit,” Jansen says.
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Jansen says IDEXX significantly increased its sales force last summer as part of a plan to sell products and services directly rather than through distributors. He says the company’s goal with this change is to showcase its accelerating revenue growth.
“In the very near term the stock could be somewhat range-bound as investors digest not only the FX impact, but also the potential for some modest share erosion at the low end given the increased competition,” Jansen says. “But longer term, they are well-positioned to capitalize from the continued increased utilization of diagnostics in the veterinary space.”
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