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IDEXX Laboratories, Inc. (IDXX) Intrinsic Value

DCF-based fair value calculation with Bear, Base, and Bull scenarios

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IDEXX Laboratories, Inc. (IDXX)

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Intrinsic Value (DCF)

Current$712.12
→
Intrinsic$295.35
-59%
$194.91$295.35$495.04
Current price reflects execution expectations above 20% growth — not unreasonable for quality businesses.
Range: Bear $195 → Bull $495. Current price implies expectations above the base case, closer to bull expectations.
Current price reflects assumptions at the upper end of our valuation range (bull case: $495).
Discount ↓Growth →16%18%20%22%
8%$373$405$439$476
10%$251$273$295$319
12%$187$203$219$237
14%$148$160$173$186

Bull Case

  • Bull case ($495) with 24% growth, 8% discount rate

Bear Case

  • Bear case ($195) implies 73% downside at 16% growth, 12% discount
  • Trading 59% above base case — execution must exceed assumptions to justify
  • Price exceeds bull case ($495) — requires exceptional execution
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5-Year Free Cash Flow Projection

Year 1$957.69M
Year 2$1.15B
Year 3$1.38B
Year 4$1.65B
Year 5$1.99B
Terminal$31.47B

📐 Model Inputs

Growth Rate20.0%5Y CAGR (cascade: 5Y→3Y→TTM)
Discount Rate9.5%WACC estimate
Terminal Growth3.0%Perpetuity rate
Base Free Cash Flow$798.08MTTM actual
Bear g×0.8, r+2%
Base Historical CAGR
Bull g×1.2, r−1.5%
ℹ️

DCF estimates based on historical growth rates extrapolated forward. See FAQ below for full methodology.

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Frequently Asked Questions

Is IDXX stock undervalued or overvalued?
🔴 OVERVALUED

IDXX trades at $712.12 vs. our DCF-derived intrinsic value of $295.35, implying -58% downside. Using a 9.5% WACC and 20.0% FCF growth assumption, the current price requires growth rates above our estimates to be justified. Even our bull case ($459.59) suggests limited upside.

What is IDXX's intrinsic value?

Using a 5-year DCF model: Base FCF of $798M, projected at 20.0% 5Y CAGR (best of revenue, EPS, or FCF growth), discounted at 9.5% WACC, with 3.0% terminal growth. Terminal value calculated via Gordon Growth Model: TV = FCF₅ × (1+g) / (WACC−g). After deducting $699M net debt and dividing by 0.08B shares: Bear $187.25 | Base $295.35 | Bull $459.59. Current price $712.12 implies -58% to base case.

How is IDXX's fair value calculated?

DCF Methodology:

① Project FCF years 1-5 using 20.0% growth derived from 5-year historical CAGR (best of revenue, EPS, or FCF growth, with 8% floor and 25% cap).

② Calculate terminal value at year 5 using perpetuity growth model with g=3.0%.

③ Discount all cash flows to PV using WACC=9.5%.

④ Sum PV of explicit period + PV of terminal value = Enterprise Value ($25.29B).

⑤ Subtract net debt, divide by shares outstanding.

Sensitivity analysis available above—adjust WACC ±2% or growth ±3% to stress-test the valuation. Implied EV/FCF multiple: 31.7x.