Should You Continue to Hold IDXX Stock in Your Portfolio?
IDEXX Laboratories, Inc. IDXX is strengthening its Companion Animal Group (“CAG”) business through recurring revenue growth, wider customer adoption and expanding diagnostic offerings. Software adoption continues to expand, with recurring revenues, cloud-native PIMS and Vello active users all posting double-digit growth. The company's international CAG business continues to perform well, driven by customer additions, instrument placements and higher utilization. Yet foreign exchange headwinds and continued weakness in U.S. veterinary clinical visits could restrict IDEXX’s full-growth potential.
Over the past year, this Zacks Rank #3 (Hold) stock has fallen 16.8% against the industry’s 2.7% growth and the S&P 500 composite’s 18.1% return.
The renowned medical device company has a market capitalization of $40.60 billion. IDEXX’s earnings surpassed estimates in each of the trailing four quarters, delivering an average surprise of 5.7%.
Let’s delve deeper.
IDXX’s Tailwinds
CAG Continues to Perform Well: IDEXX continues to demonstrate strong global execution in the CAG business. Worldwide CAG Diagnostics’ recurring revenues increased 10.3% organically in the second quarter of 2026, led by expanded volumes and approximately 4% average global net price improvement. IDEXX VetLab consumable revenue growth was supported by net new customers, utilization gains and menu expansion. Global Reference Lab revenues increased more than 10% organically, as customer additions and broader testing utilization offset the effect of weaker U.S. wellness visits. The inVue Dx installed base exceeded 9,000 instruments after 1,602 placements in the second quarter.
Fine Needle Aspirate remains in controlled rollout with broader availability planned by year-end. Cancer Dx has surpassed 10,000 ordering clinics globally and is being expanded to include mast cell tumor detection. These trends broaden IDEXX's recurring revenue opportunity and support its 2026 organic CAG Diagnostics recurring revenue growth outlook of 9.5-10.7%.
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Cloud-Based Software in Trend: IDEXX's software ecosystem continues to complement its diagnostics franchise by improving practice workflows and creating additional opportunities to integrate testing into clinical protocols. Veterinary software and diagnostic imaging revenues increased approximately 12% organically in the second quarter of 2026, while recurring software revenues grew about 10%. The cloud-native PIMS installed base continued to expand at a double-digit rate.
Vello also recorded double-digit sequential growth in active users, extending IDEXX's reach into appointment generation, personalized client outreach and forward booking. The company noted that practices using ezyVet with Vello show higher wellness bloodwork inclusion rates than those using competitive on-premise PIMS, linking software adoption with diagnostic utilization. Diagnostic imaging has also contributed to the platform. The second quarter of 2026 marked IDEXX's sixth consecutive record quarter for digital radiography system placements, supported by demand for the DR50 Plus platform.
Strong Global Performance: International markets remain an important component of IDEXX's long-term CAG growth strategy. International CAG Diagnostics recurring revenues advanced nearly 12% organically in the second quarter of 2026, sustaining double-digit growth and benefiting primarily from volume expansion. The growth can be attributed to net new customer additions, expansion of the premium instrument installed base and higher same-store utilization.
IDEXX is set to expand its commercial footprint in four international countries during the remainder of 2026, alongside targeted additions in the United States. The company expects these investments to increase customer engagement and support adoption of newer diagnostic products. Cancer Dx is now available in North America, Europe and Australia, while inVue Dx placements continue to ramp up outside the United States.
What Ails IDEXX?
Foreign Exchange Exposure: IDEXX's global operations create continuing exposure to changes in foreign currency exchange rates. Currency changes benefited second-quarter 2026 operating profit by approximately $6 million and EPS by $0.06, but updated exchange-rate assumptions reduced the company's full-year revenue outlook by $15 million relative to its prior estimates. The company also expects currency movements to create an approximately 70-basis-point drag on reported revenue growth in the third quarter.
Clinical Visit Weakness Remains a Constraint: U.S. veterinary visit trends continue to limit one component of IDEXX's underlying market growth. U.S. same-store clinical visits declined an estimated 1.3% in the second quarter of 2026. Wellness visits remained the primary source of weakness and fell 3.4%, while non-wellness visits posted modest growth. Reference laboratory testing carries greater exposure to wellness activity, making prolonged weakness relevant even as IDEXX gains customers and expands diagnostic utilization. Management assumes approximately a 1.5% decline in U.S. clinical visits during the second half of 2026, broadly consistent with recent trends.
IDXX Stock Estimate Trend
The Zacks Consensus Estimate for IDEXX’s 2026 earnings per share (EPS) has risen 0.9% to $14.81 in the past 60 days.
The Zacks Consensus Estimate for the 2026 revenues is pegged at $4.72 billion. This suggests a 9.7% jump from the year-ago reported number.
Key Picks
Some better-ranked stocks in the broader medical space are Veracyte VCYT, Globus Medical GMED and Teleflex TFX.
Veracyte has an earnings yield of 4.7% against the industry’s negative 1.4% yield. Shares of the company have risen 32.7% compared with the industry’s 2.7% growth. VCYT’s earnings outpaced estimates in each of the trailing four quarters, the average surprise being 41.8%.
VCYT sports a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Globus Medical, sporting a Zacks Rank #1, has an earnings yield of 6.7% against the industry’s negative 1.4% yield. Its earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 27.9%. GMED shares have rallied 36% compared with the industry’s 2.7% growth over the past year.
Teleflex, carrying a Zacks Rank #2, has an estimated long-term earnings growth rate of 20.7% compared with the industry’s 14.5% growth. Its earnings beat estimates in three of the trailing four quarters and missed on one occasion, the average surprise being 3.2%. TFX shares have gained 1.3% compared with the industry’s 2.7% growth over the past year.
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This article originally published on Zacks Investment Research (zacks.com).
