Neo Performance Materials Inc (NEO) AI Stock Analysis

• Market Cap: C$350.07M
• Dividend Yield: 5.2%
• Average Volume (3M): 79.66K
• Price to Earnings (P/E): ―
• Beta (1Y): 1.17
• Revenue Growth: -15.41%
• EPS Growth: -69.47%
• Country: CA
• Employees: 1,773
• Sector: Basic Materials
• Sector Strength: 52
• Industry: Chemicals - Specialty
• EPS (TTM): -0.43
• Shares Outstanding: 41,824,314
• 10 Day Avg. Volume: 67,014
• 30 Day Avg. Volume: 79,659
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 0.58
• Price to Cash Flow (P/CF): 3.90
• P/FCF Ratio: 0.00
• 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: C$15.15
• Price Target Upside: 81.00% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 2

Neo Performance Materials has a moderate overall stock score, reflecting its financial challenges and recent strategic initiatives. While the company has significant strengths such as strong EBITDA growth and strategic project execution, it faces hurdles like declining revenues and operational inefficiencies. The technical outlook is neutral to positive, and recent corporate events support long-term growth. However, the negative P/E ratio highlights ongoing profitability concerns.

Neo Performance Materials Inc Business Overview & Revenue Model

Company Description

Neo Performance Materials Inc. (NEO) is a global leader in the production of advanced industrial materials, focusing on rare earth and rare metal-based functional materials. The company operates in key sectors such as automotive, electronics, and environmental technologies. NEO's core products include rare earth magnetic powders, specialty chemicals, and engineered materials that are critical in the manufacturing of high-performance applications.

How the Company Makes Money

Neo Performance Materials Inc. generates revenue through the production and sale of advanced industrial materials, primarily focusing on rare earth and rare metal-based products. Key revenue streams include the sale of magnetic powders, which are integral to the production of high-efficiency motors and generators, specialty chemicals used in various industrial applications, and engineered materials for emission reduction and electronic devices. The company benefits from long-term partnerships with leading manufacturers in the automotive and electronics industries, and its revenue is bolstered by the increasing demand for green technologies and energy-efficient solutions. NEO's vertically integrated supply chain, from sourcing raw materials to producing finished products, enhances its operational efficiency and profitability.

Neo Performance Materials Inc Financial Statement Overview

Summary

Neo Performance Materials Inc faces challenges with declining revenue and profitability pressures. While the balance sheet remains strong with low leverage, cash flow management requires attention due to high capital expenditures leading to negative Free Cash Flow. The company needs to focus on improving operational efficiencies to enhance profitability and cash flow.

Income Statement

Neo Performance Materials Inc shows a declining trend in revenue with a noticeable decrease from 2022 to the TTM (Trailing-Twelve-Months). The Gross Profit Margin stands at approximately 22.34% for TTM, which is a moderate level in the chemicals industry, while the company is currently experiencing negative net income, indicating challenges in profitability. The EBIT and EBITDA margins are relatively low, reflecting operational efficiency issues.

Balance Sheet

The balance sheet is relatively strong, with a Debt-to-Equity Ratio of approximately 0.11 in the TTM, indicating low leverage. The Equity Ratio is solid at around 66.06%, suggesting a strong equity base. However, there is a slight decrease in Stockholders' Equity compared to previous years, which may need monitoring.

Cash Flow

Cash flow analysis reveals a negative Free Cash Flow in the TTM, showing a significant decline from the previous year. The Operating Cash Flow to Net Income Ratio is positive, suggesting operational cash generation, but the Free Cash Flow to Net Income Ratio is adversely impacted by high capital expenditures, indicating cash management challenges.

Breakdown
TTM	Dec 2023	Dec 2022	Dec 2021	Dec 2020	Dec 2019
Income Statement		Total Revenue
469.59M	571.54M	640.30M	539.25M	346.69M	407.46M
	Gross Profit
104.94M	108.73M	149.37M	150.53M	80.33M	103.59M
	EBIT
17.48M	11.17M	58.61M	59.89M	1.11M	37.50M
	EBITDA
29.79M	23.67M	74.92M	57.99M	18.29M	53.09M
	Net Income Common Stockholders
-2.26M	-8.44M	25.95M	35.18M	-61.15M	22.92M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
71.02M	86.89M	147.49M	89.04M	72.22M	84.73M
	Total Assets
543.02M	627.00M	676.46M	594.08M	486.54M	531.23M
	Total Debt
3.97M	29.42M	50.00M	9.48M	5.97M	4.67M
	Net Debt
-67.05M	-57.48M	-97.49M	-79.56M	-66.26M	-80.07M
	Total Liabilities
105.85M	191.69M	198.82M	163.57M	123.06M	102.60M
	Stockholders Equity
432.42M	432.15M	474.45M	427.63M	362.00M	424.64M
Cash Flow		Free Cash Flow
-43.67M	19.88M	-13.77M	-11.63M	2.46M	59.57M
	Operating Cash Flow
32.85M	61.62M	3.70M	-2.16M	10.07M	71.30M
	Investing Cash Flow
-72.51M	-59.12M	-17.43M	-7.01M	-7.36M	-22.89M
	Financing Cash Flow
-10.03M	-62.04M	74.79M	26.20M	-17.91M	-34.59M

Neo Performance Materials Inc Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 8.37
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:NEO, the sentiment is Positive. The current price of 8.37 is below the 20-day moving average (MA) of 8.54, above the 50-day MA of 8.32, and above the 200-day MA of 7.94, indicating a neutral trend. The MACD of 0.20 indicates Negative momentum. The RSI at 55.94 is Neutral, neither overbought nor oversold. The STOCH value of 30.29 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSE:NEO.

Neo Performance Materials Inc Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
NEO	67 Neutral	C$350.07M	―	-3.15%	5.20%	-15.41%	-69.47%
LGO	50 Neutral	$126.94M	―	-24.10%	―	-36.34%	-66.53%
Sector *	47 Neutral	$2.43B	-2.83	-21.77%	3.74%	4.16%	-28.83%
AVL	42 Neutral	$15.37M	―	-5.00%	―	―	-1118.18%
CCE	39 Underperform	C$14.84M	―	-45.75%	―	―	-1014.38%
UCU	37 Underperform	C$82.19M	―	-34.08%	―	―	-112.17%

Neo Performance Materials Inc Corporate Events

Neo Performance Materials Secures Niobium Supply from Malawi

Neo Performance Materials Inc. has signed a non-binding memorandum of understanding with Globe Metals & Mining for the offtake of niobium pentoxide from the Kanyika Niobium Project in Malawi. This agreement marks a significant step in Neo’s strategy to diversify and secure its supply chain for critical metals, enhancing its position in the global market for strategic materials. The deal also allows Neo to plan for long-term supply chain optimization, potentially impacting its operations and stakeholder relationships positively.

Neo Performance Materials Sells Majority Stake in Chinese Assets to Shenghe

Neo Performance Materials Inc. has sold a majority equity interest in its Chinese rare earth separation assets, JAMR and ZAMR, to Shenghe Resources Holding Co., Ltd. This transaction is part of Neo’s strategy to streamline its operations and focus on high-margin downstream products. The sale is expected to enhance Neo’s operational transformation by improving capital returns and reducing earnings volatility associated with rare earth price fluctuations. Neo retains a minority stake in both companies and secures exclusive distribution rights for JAMR’s products outside China, ensuring continuity of supply for its customers. This move aligns with Neo’s strategic initiatives to optimize its asset portfolio and support long-term growth ambitions.

Neo Performance Materials Reports Strong 2024 Financial Results and Strategic Growth Initiatives

Neo Performance Materials Inc. reported a significant growth in its financial performance for 2024, with a 73% increase in Adjusted EBITDA, surpassing its guidance by 20%. The company successfully executed major capital projects, including the completion of its Emissions Control Catalyst facility under budget and on time, and is on track to open its European Permanent Magnet facility in 2025. Neo is also streamlining its operations by divesting non-core assets, such as its Chinese separation facilities, to focus on high-value-add growth businesses. With a strong balance sheet and liquidity position, Neo is well-positioned for long-term growth and value creation for its shareholders.

Neo Performance Materials Faces €10.3 Million Judgment in Patent Case

Neo Performance Materials Inc. announced that the Regional Court of Mannheim in Germany has ruled that its subsidiary, Neo Chemicals & Oxides (Europe) Ltd., is liable for damages of approximately €10.3 million plus interest, related to the infringement of a European patent. The judgment, which is less than the amount initially claimed by the plaintiff, Rhodia Opérations SAS (now Solvay), is not expected to impact Neo’s Q1 2025 earnings as the amount is already accounted for in the company’s financial statements. The patent in question has expired and does not affect Neo’s current products or earnings.

Neo Performance Materials to Announce Q4 2024 Results on March 18, 2025

Neo Performance Materials Inc. announced that it will release its fourth-quarter results for 2024 on March 18, 2025, before the Toronto market opens. The company will also host a teleconference call the same day to discuss these results. This announcement highlights Neo’s ongoing commitment to transparency and engagement with stakeholders, providing insights into the company’s financial performance and strategic positioning in the industry.