Yahoo Finance The total return for IDEXX Laboratories (NASDAQ:IDXX) investors has risen faster than earnings growth over the last five years
The most you can lose on any stock (assuming you don't use leverage) is 100% of your money. But on a lighter note, a good company can see its share price rise well over 100%. One great example is IDEXX Laboratories, Inc. (NASDAQ:IDXX) which saw its share price drive 132% higher over five years. Unfortunately, though, the stock has dropped 5.2% over a week. But this could be related to the soft market, with stocks selling off around 5.3% in the last week.
Since the long term performance has been good but there's been a recent pullback of 5.2%, let's check if the fundamentals match the share price.
View our latest analysis for IDEXX Laboratories
To paraphrase Benjamin Graham: Over the short term the market is a voting machine, but over the long term it's a weighing machine. One way to examine how market sentiment has changed over time is to look at the interaction between a company's share price and its earnings per share (EPS).
Over half a decade, IDEXX Laboratories managed to grow its earnings per share at 22% a year. The EPS growth is more impressive than the yearly share price gain of 18% over the same period. Therefore, it seems the market has become relatively pessimistic about the company. Having said that, the market is still optimistic, given the P/E ratio of 56.27.
You can see below how EPS has changed over time (discover the exact values by clicking on the image).
This free interactive report on IDEXX Laboratories' earnings, revenue and cash flow is a great place to start, if you want to investigate the stock further.
A Different Perspective
While it's certainly disappointing to see that IDEXX Laboratories shares lost 5.2% throughout the year, that wasn't as bad as the market loss of 7.3%. Longer term investors wouldn't be so upset, since they would have made 18%, each year, over five years. It could be that the business is just facing some short term problems, but shareholders should keep a close eye on the fundamentals. While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. Consider risks, for instance. Every company has them, and we've spotted 1 warning sign for IDEXX Laboratories you should know about.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of companies we expect will grow earnings.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on US exchanges.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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