Neogen (NEOG) AI Stock Analysis

• Market Cap: $1.21B
• Dividend Yield: N/A
• Average Volume (3M): 6.62M
• Price to Earnings (P/E): ―
• Beta (1Y): 0.80
• Revenue Growth: -2.50%
• EPS Growth: -30760.27%
• Country: US
• Employees: 2,917
• Sector: Healthcare
• Sector Strength: 66
• Industry: Medical - Diagnostics & Research
• EPS (TTM): -0.05
• Shares Outstanding: 217,038,270
• 10 Day Avg. Volume: 10,845,003
• 30 Day Avg. Volume: 6,617,498
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 2.10
• Price to Cash Flow (P/CF): 11.90
• P/FCF Ratio: 8.20
• 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: $9.70
• Price Target Upside: 120.96% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 3

Neogen's overall score is weighed down by financial and technical challenges, with significant losses and weak momentum. While the company has a strong balance sheet and successful loan refinancing, immediate financial and operational concerns dominate. The lowered earnings outlook and macroeconomic uncertainties further constrain the score, despite some positive developments in corporate events and strategic initiatives.

Positive Factors

Financial Position

Animal safety divestitures seem imminent, potentially improving the company's financial position.

Food Safety Performance

Core food safety performance is improving, with a reported increase of 7%.

Operational Efficiency

The setup is considered the best it has been in years, with integration almost complete, which can lead to an improved P&L statement and free cash flow.

Negative Factors

Debt Concerns

Concerns about Neogen’s rising leverage ratio and debt covenants are weighing on the stock.

Genomic Services

The genomic services business is expected to decrease to a $50 million annual run-rate, down from roughly $90 million.

Guidance and Market Conditions

Lowered guidance comes from worsening end-markets and tariff headwinds.

Neogen Business Overview & Revenue Model

Company Description

Neogen Corporation, together with its subsidiaries, develops, manufactures, and markets various products for food and animal safety worldwide. It operates through two segments, Food Safety and Animal Safety. The Food Safety segment offers diagnostic test kits and related products to detect dangerous and unintended substances in food and animal feed, including foodborne pathogens, spoilage organisms, natural toxins, food allergens, genetic modifications, ruminant by-products, meat speciation, drug residues, pesticide residues, and general sanitation concerns; and AccuPoint Advanced rapid sanitation test to detect the presence of adenosine triphosphate, a chemical found in living cells. This segment offers its products primarily to food and feed producers and processors; grain producers and processors; producers of cookies, crackers, candy, ice cream, and other processed foods; meat and poultry processors, seafood processors, fruit and vegetable producers, and dairies; laboratories; and producers of pharmaceuticals, cosmetics, and veterinary vaccines. The Animal Safety segment provides veterinary instruments, pharmaceuticals, vaccines, topicals, parasiticides, diagnostic products, rodenticides, cleaners, disinfectants, insecticides, and genomics testing services for the animal safety market. This segment offers various products for researchers to detect biologically active substances. Its drug detection immunoassay test kits are used for the detection of abused and therapeutic drugs in farm and racing animals; detection of drug residues in meat and meat products; and human forensic toxicology drug screening applications. In addition, this segment's products are used to maintain sanitary conditions and limit the potential hazards of bacteria, fungi, and viruses. Neogen Corporation was incorporated in 1981 and is headquartered in Lansing, Michigan.

How the Company Makes Money

Neogen Corporation makes money primarily through the sale of its diagnostic test kits and related products, which are used extensively in the food production and processing industries to ensure safety and compliance with regulatory standards. The company's revenue streams are heavily reliant on its two major segments: Food Safety and Animal Safety. Within the Food Safety segment, Neogen generates income by offering solutions that help food producers and processors detect contaminants and ensure clean production environments. In the Animal Safety segment, revenue is derived from the sale of veterinary pharmaceuticals, vaccines, and disinfection products that support animal health and productivity. Additionally, strategic partnerships and collaborations with food producers, agricultural companies, and research institutions enhance its market reach and contribute to its earnings.

Neogen Financial Statement Overview

Summary

Neogen faces significant profitability challenges despite strong revenue growth and a stable balance sheet. Although the absence of debt is positive, cash flow weaknesses and negative earnings raise concerns about long-term financial health. Strengthening profitability and cash flow generation should be a priority.

Income Statement

Neogen's income statement shows a concerning trajectory with declining net income and negative EBIT in the TTM period. The gross profit margin remains relatively stable, but the significant net loss in the TTM period highlights profitability issues. Revenue growth has been strong, especially from 2022 to 2023, but recent profitability challenges pose risks.

Balance Sheet

The balance sheet reflects a robust equity position with a zero debt situation in the TTM period, indicating strong financial stability. The company's return on equity has been negatively impacted by recent losses, though the equity ratio remains healthy, demonstrating solid asset management.

Cash Flow

Cash flow analysis reveals challenges, with negative free cash flow in recent periods. While operating cash flow remains positive, it is weak compared to net income, indicating cash generation issues. The free cash flow to net income ratio is unfavorable, showing sustainability concerns.

Breakdown
TTM	Jun 2024	Jun 2023	Jun 2022	Jun 2021	Jun 2020
Income Statement		Total Revenue
913.83M	924.22M	822.45M	527.16M	468.46M	418.17M
	Gross Profit
448.62M	463.90M	405.95M	243.01M	215.06M	196.28M
	EBIT
-425.63M	58.66M	37.52M	34.92M	53.13M	49.13M
	EBITDA
-341.33M	182.60M	122.30M	107.89M	98.30M	85.92M
	Net Income Common Stockholders
-476.33M	-9.42M	-22.87M	48.31M	60.88M	59.48M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
31.11M	170.94M	245.57M	381.05M	381.09M	343.67M
	Total Assets
165.30M	4.55B	4.55B	992.93M	920.19M	797.18M
	Total Debt
0.00	906.24M	900.00M	986.69M	1.29M	1.05M
	Net Debt
-31.11M	735.63M	736.76M	605.64M	-379.80M	-342.62M
	Total Liabilities
18.96M	1.40B	1.42B	105.56M	79.81M	72.00M
	Stockholders Equity
146.34M	3.14B	3.13B	887.37M	840.38M	725.18M
Cash Flow		Free Cash Flow
-37.59M	-76.16M	-24.73M	43.61M	54.38M	61.83M
	Operating Cash Flow
18.79M	35.26M	41.03M	68.04M	81.09M	85.88M
	Investing Cash Flow
-82.98M	-29.31M	201.04M	-97.23M	-105.56M	-88.78M
	Financing Cash Flow
830.00K	1.92M	-118.08M	6.81M	33.54M	29.41M

Neogen Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 4.39
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Positive
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For NEOG, the sentiment is Negative. The current price of 4.39 is below the 20-day moving average (MA) of 7.21, below the 50-day MA of 8.81, and below the 200-day MA of 13.23, indicating a bearish trend. The MACD of -1.27 indicates Positive momentum. The RSI at 19.00 is Positive, neither overbought nor oversold. The STOCH value of 17.36 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for NEOG.

Neogen Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CSTL	76 Outperform	$620.45M	35.10	4.31%	―	51.09%	―
SHC	61 Neutral	$2.97B	67.40	10.45%	―	4.88%	-13.56%
FLGT	54 Neutral	$551.26M	―	-3.76%	―	-1.99%	74.89%
NEO	53 Neutral	$1.23B	―	-8.54%	―	11.65%	11.33%
MYGN	51 Neutral	$704.19M	―	-17.15%	―	12.15%	61.33%
Sector *	51 Neutral	$5.19B	3.13	-40.94%	2.95%	17.94%	2.00%
NEOG	44 Neutral	$1.21B	―	-16.71%	―	-2.50%	-30760.27%

Neogen Corporate Events

Neogen CEO John Adent to Step Down

On April 9, 2025, Neogen Corporation announced that CEO and President John Adent will be stepping down, continuing in his role until a successor is appointed. The board has formed a special committee to oversee the search for a new CEO while supporting ongoing strategic initiatives. Adent will transition to a Special Advisor role until October 31, 2025, maintaining his salary and benefits. The transition aims to ensure a smooth leadership change as Neogen continues to focus on growth and profitability in the food safety market.

Spark’s Take on NEOG Stock

According to Spark, TipRanks’ AI Analyst, NEOG is a Neutral.

Neogen faces significant profitability and cash flow challenges despite a strong balance sheet. Technical indicators are weak, and valuation is unattractive with negative earnings. While restructuring and loan refinancing offer some positives, immediate financial concerns dominate the outlook.

To see Spark’s full report on NEOG stock, click here.

Neogen Announces Successful Loan Refinancing

On April 4, 2025, Neogen Corporation announced the successful refinancing of its term loan and revolving credit facility, extending the maturity to April 2030. The refinancing, which involved a $450 million term loan and a $250 million revolving credit facility, results in a lower interest rate and provides the company with additional balance sheet flexibility, reflecting its favorable credit profile and strong banking partnerships.

Spark’s Take on NEOG Stock

According to Spark, TipRanks’ AI Analyst, NEOG is a Neutral.

Neogen’s overall score is weighed down by profitability challenges and weak technical indicators. While the company shows potential with strategic initiatives and revenue growth, immediate financial and operational concerns take precedence. The absence of debt and focus on food security initiatives provide some stability, but they are not enough to offset the current financial and valuation challenges.

To see Spark’s full report on NEOG stock, click here.