Morgan Stanley analyst Tejas Savant has maintained their neutral stance on NEO stock, giving a Hold rating yesterday.
Tejas Savant has given his Hold rating due to a combination of factors affecting NeoGenomics’ recent performance. The company’s first-quarter revenue growth was slightly below expectations, primarily due to softness in the biopharma sector and lower than anticipated average unit prices (AUP). Although there was an increase in volume, it was not enough to offset the decline in non-clinical revenue, which fell significantly compared to the previous year.
Additionally, the growth in Next-Generation Sequencing (NGS) was lighter than expected, impacted by a challenging year-over-year comparison. Despite these challenges, the clinical revenue showed positive momentum, and the company’s valuation provides some downside protection following a sharp pullback. However, the path forward for minimal residual disease (MRD) remains uncertain, and successful execution of the NGS pipeline is crucial for recovery. Therefore, the Hold rating reflects a cautious stance amid these mixed signals.
In another report released yesterday, Bank of America Securities also reiterated a Hold rating on the stock with a $10.00 price target.