Why IDXX is a Top Momentum Stock for the Long Term

Understanding Zacks Premium and Its Benefits for Investors

For both new and experienced investors, the goal of maximizing returns in the stock market while investing with confidence is a common aspiration. One tool that can help achieve this is Zacks Premium, which offers a variety of resources to support informed decision-making.

Zacks Premium provides daily updates on the Zacks Rank and Zacks Industry Rank, giving users access to comprehensive insights into stock performance. It also includes full access to the Zacks #1 Rank List, Equity Research reports, and Premium stock screens. These features are designed to help investors become more knowledgeable and confident in their investment choices.

In addition to these tools, Zacks Premium also includes access to the Zacks Style Scores, which serve as complementary indicators to the Zacks Rank. These scores offer valuable insights into a stock’s potential to outperform the market over the next 30 days.

What Are the Zacks Style Scores?

The Zacks Style Scores were developed alongside the Zacks Rank and are used to evaluate stocks based on three widely recognized investing methodologies: value, growth, and momentum. Each stock receives an alphabetic rating from A to F, with A being the best. This system helps investors identify stocks with the highest potential to beat the market.

The Style Scores are divided into four categories:

Value Score

Value investors focus on finding undervalued stocks before the broader market recognizes their true worth. The Value Style Score uses financial ratios such as P/E, PEG, Price/Sales, and Price/Cash Flow to identify stocks that are attractively priced and potentially discounted.

Growth Score

Growth investors look for companies with strong future prospects and solid financial health. The Growth Style Score analyzes factors like projected and historical earnings, sales, and cash flow to find stocks that are likely to experience sustainable growth over time.

Momentum Score

Momentum trading involves capitalizing on trends in a stock’s price or earnings outlook. The Momentum Style Score helps investors determine the best times to build positions by analyzing metrics such as one-week price changes and monthly shifts in earnings estimates.

VGM Score

The VGM Score combines the three Style Scores—value, growth, and momentum—into a single rating. It helps investors find stocks that offer the best mix of value, growth potential, and momentum. This score is particularly useful when used in conjunction with the Zacks Rank.

How Style Scores Work with the Zacks Rank

The Zacks Rank is a proprietary stock-rating model that leverages earnings estimate revisions to help investors build successful portfolios. Since 1988, stocks ranked #1 (Strong Buy) have delivered an average annual return of +23.75%, significantly outperforming the S&P 500.

However, with over 800 top-rated stocks available, it can be challenging to determine which ones are the best fit for individual investment goals. This is where the Style Scores come into play.

Investors should prioritize stocks with a Zacks Rank of #1 or #2 and Style Scores of A or B. Even if a stock has a #3 (Hold) rank, it should still have A or B scores to maximize upside potential. Stocks with lower ranks, such as #4 (Sell) or #5 (Strong Sell), even if they have high Style Scores, may carry higher risks due to negative earnings trends.

Stock to Watch: Idexx Laboratories (IDXX)

Idexx Laboratories (IDXX), based in Westbrook, ME, is a leading developer, manufacturer, and distributor of products and services for the companion animal veterinary, livestock and poultry, water testing, and dairy markets. The company also provides portable electrolytes and blood gas analyzers for the human point-of-care medical diagnostics market.

Currently, IDXX holds a Zacks Rank of #3 (Hold) and a VGM Score of B. However, its Momentum Style Score is an impressive A, and the stock has risen 19.1% over the past four weeks.

Looking ahead, four analysts have recently raised their earnings estimates for fiscal 2025, with the Zacks Consensus Estimate increasing to $12.39 per share. IDXX has consistently exceeded earnings expectations, with an average surprise of +6.1%.

Given its strong Zacks Rank and top-tier Momentum and VGM Style Scores, IDXX is a stock that investors should consider adding to their watchlist.