NeoGenomics: Strategic Adjustments and Operational Efficiency Justify Buy Rating Despite Revenue Slowdown

NeoGenomics (NEO – Research Report), the Healthcare sector company, was revisited by a Wall Street analyst today. Analyst Michael Matson from Needham maintained a Buy rating on the stock and has a $8.50 price target.

Michael Matson has given his Buy rating due to a combination of factors including NeoGenomics’ performance and strategic adjustments. Despite a revenue miss in the first quarter of 2025, the company’s EBITDA exceeded expectations, indicating operational efficiency. Management’s decision to raise revenue guidance for 2025, following the Pathline acquisition, reflects confidence in future growth prospects.
Additionally, while there is a noted slowdown in revenue growth, with a decrease from 10.6% in the fourth quarter of 2024 to 7.5% in the first quarter of 2025, the company has shown resilience through improved margins. Adjusted gross and EBITDA margins have increased year-over-year, driven by favorable pricing, volume, and cost management. Although there are concerns about the alignment of long-term growth projections with recent performance, the strategic moves and operational strengths justify maintaining a Buy rating, albeit with a lowered price target.