Idexx Earnings: Fair Value Estimate Intact, Softness in Visit Volume Could Linger Into 2024

Idexx Labs reported third-quarter results that generally put the firm on track to meet our full-year expectations, and we’re reiterating our $351 fair value estimate. Though the market may have been disappointed with quarterly top-line growth of 9%, our projections for 2023 remain bounded by management’s lower outlook. We saw little in the quarter to change our view of Idexx’s narrow economic moat, which is rooted in switching costs related to its installed base of benchtop analyzers in animal hospitals, as well as intangible assets including its high-touch service for vets. Nonetheless, there are some endogenous factors that have weighed on the larger animal health industry recently, and Idexx has not been immune.