NeoGenomics (NEO) AI Stock Analysis

• Market Cap: $1.20B
• Dividend Yield: N/A
• Average Volume (3M): 1.10M
• Price to Earnings (P/E): ―
• Beta (1Y): 1.58
• Revenue Growth: 11.65%
• EPS Growth: 11.33%
• Country: US
• Employees: 2,200
• Sector: Healthcare
• Sector Strength: 74
• Industry: Medical Diagnostics & Screening
• EPS (TTM): -0.62
• Shares Outstanding: 128,461,380
• 10 Day Avg. Volume: 1,417,592
• 30 Day Avg. Volume: 1,095,057
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 1.86
• Price to Cash Flow (P/CF): 31.40
• P/FCF Ratio: 31.40
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $18.50
• Price Target Upside: 82.27% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 13

NeoGenomics shows robust revenue growth and improving financial metrics, but profitability and cash flow challenges weigh on its stock score. The technical analysis suggests a bearish trend, while the earnings call provides optimism with a positive outlook. Valuation remains a concern due to negative earnings. Overall, NeoGenomics is in a growth phase but needs to address profitability to improve its stock appeal.

Positive Factors

Future Prospects

NEO expects to launch its new NEO Pan Tracer liquid biopsy (therapy selection) blood test panel in 1H'25 which may be additive to growth.

Growth Opportunities

NGS led the way with more than 40% year-over-year growth, showcasing strong performance in a high-growth market.

Negative Factors

Leadership Change

Shares of NEO have pulled back by ~30% following the surprising news that the company's CEO, Chris Smith, will leave both the CEO seat and the Board.

NeoGenomics Business Overview & Revenue Model

Company Description

NeoGenomics, Inc. is a clinical laboratory, which specializes in cancer genetics diagnostic testing and pharma services. It operates through the following two segments: Clinical and Pharma Services. The Clinical Services segment offers clinical cancer testing services to community-based pathologists. The Pharma Services segments supports pharmaceutical firms in their drug development programs by supporting various clinical trials and research. The Clinical Services Segment provides various clinical testing services to community-based pathology practices, hospital pathology labs and academic centers with reimbursement from various payers including client direct billing, commercial insurance, Medicare and other government payers, and patients. The Pharma Services segment: provides comprehensive testing services in supports pharmaceutical clients' oncology programs from discovery to commercialization. Its services include cytogenetics, fluorescence in-situ hybridization, flow cytometry, immunohistochemistry, anatomic pathology and molecular genetic testing. The company was founded by Michael T. Dent on October 29, 1998 and is headquartered in Fort Myers, FL.

How the Company Makes Money

NeoGenomics generates revenue primarily through its clinical services and pharma services segments. The clinical services segment provides cancer diagnostic testing to healthcare providers, with revenue coming from the fees charged for each test. This includes a wide array of testing services such as oncology-focused tests that diagnose and monitor cancer, as well as genetic tests that help in understanding the cancer's profile. The pharma services segment caters to pharmaceutical companies and research institutions, providing services such as clinical trial testing, research, and development support. Revenue in this segment is derived from contractual agreements with pharmaceutical firms for services like biomarker discovery, clinical trial support, and companion diagnostic development. Key factors contributing to their earnings include the growing demand for personalized medicine and targeted therapies in oncology, partnerships with leading pharmaceutical companies, and a robust portfolio of proprietary and exclusive tests.

NeoGenomics Financial Statement Overview

Summary

NeoGenomics exhibits solid revenue growth but faces challenges in achieving profitability and positive cash flow. The balance sheet is relatively strong, but leverage and ongoing losses are areas of concern. The company needs to focus on improving operational efficiency and cash flow generation to enhance its financial health.

Income Statement

NeoGenomics has shown consistent revenue growth over the years, with a significant increase from $408.8 million in 2019 to $660.6 million in 2024. However, the company has struggled with profitability, consistently reporting negative EBIT and net income in recent years. The gross profit margin has remained relatively stable, indicating efficient cost management, but the net profit margin remains negative due to high operating costs.

Balance Sheet

The balance sheet shows a stable financial position with a significant equity base, as evidenced by a healthy equity ratio. However, the debt-to-equity ratio indicates moderate leverage, which could pose a risk if not managed carefully. Return on equity has been negative in recent years due to ongoing net losses.

Cash Flow

Cash flows have been a challenge, with negative free cash flow in recent years, although there's an improving trend in operating cash flow. The company has struggled to convert net income into positive cash flow, impacting its financial flexibility.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
660.57M	591.64M	509.73M	484.33M	444.45M
	Gross Profit
290.10M	244.60M	187.90M	187.06M	185.89M
	EBIT
-92.11M	-107.74M	-153.11M	-9.99M	-2.13M
	EBITDA
-1.51M	-17.61M	-78.63M	52.08M	34.85M
	Net Income Common Stockholders
-78.73M	-87.97M	-144.25M	-8.35M	4.17M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
386.84M	415.20M	437.99M	515.39M	296.26M
	Total Assets
1.64B	1.68B	1.74B	1.87B	988.33M
	Total Debt
605.33M	611.68M	610.93M	612.79M	218.22M
	Net Debt
238.32M	269.19M	347.75M	295.96M	-10.49M
	Total Liabilities
735.70M	739.69M	742.01M	761.50M	294.04M
	Stockholders Equity
902.34M	941.54M	998.02M	1.11B	694.29M
Cash Flow		Free Cash Flow
-34.04M	-30.70M	-96.88M	-90.86M	-27.64M
	Operating Cash Flow
7.02M	-1.95M	-65.99M	-26.72M	1.46M
	Investing Cash Flow
12.86M	76.71M	517.00K	-632.37M	-159.44M
	Financing Cash Flow
4.65M	4.55M	11.83M	725.28M	235.60M

NeoGenomics Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 10.15
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For NEO, the sentiment is Negative. The current price of 10.15 is below the 20-day moving average (MA) of 11.98, below the 50-day MA of 14.11, and below the 200-day MA of 14.89, indicating a bearish trend. The MACD of -1.32 indicates Positive momentum. The RSI at 33.13 is Neutral, neither overbought nor oversold. The STOCH value of 16.23 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for NEO.

NeoGenomics Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
QGEN	74 Outperform	$8.23B	101.80	2.63%	―	0.62%	-72.32%
EXAS	53 Neutral	$8.83B	―	-42.83%	―	10.37%	-389.98%
GH	53 Neutral	$5.12B	―	312.48%	―	31.04%	16.91%
NEO	52 Neutral	$1.20B	―	-8.54%	―	11.65%	11.33%
Sector *	49 Neutral	$7.05B	0.34	-55.09%	2.46%	25.27%	-3.43%
ILMN	49 Neutral	$13.45B	―	-51.54%	―	-2.93%	-4.69%
BIO	48 Neutral	$7.11B	―	-28.07%	―	-3.92%	-202.80%

NeoGenomics Corporate Events

NeoGenomics Announces Executive Bonuses and Revenue Growth

On January 14, 2025, NeoGenomics announced it had awarded retention bonuses to key executives to reward and incentivize their performance. The bonuses, aimed at retaining Jeffrey Sherman, Melody Harris, and Warren Stone, include cash payments and restricted stock units, with vesting conditions linked to continued employment. The following day, NeoGenomics also provided its 2025 financial guidance, projecting revenue growth of 12-13% annually and expecting total revenues between $735 million to $745 million. The company plans to expand its leadership in oncology testing, enhance operational efficiencies, and achieve positive cash flow, reflecting its patient-centric strategy and focus on product innovation.

NeoGenomics Announces CEO Transition and Leadership Change

NeoGenomics announced the retirement of CEO Chris Smith, effective April 1, 2025, who will continue as a special advisor. Tony Zook, an experienced healthcare executive, will succeed Smith as CEO, bringing expertise in commercial operations and strategic leadership. Under Smith’s leadership, NeoGenomics transformed significantly, achieving double-digit revenue growth and improving its financial position. Zook’s appointment is expected to sustain the company’s growth trajectory and reinforce its leadership in oncology testing.