Leerink Partners analyst Puneet Souda has maintained their bullish stance on NEO stock, giving a Buy rating on March 11.
Puneet Souda has given his Buy rating due to a combination of factors surrounding NeoGenomics’ strategic acquisition of Pathline. This acquisition is expected to significantly enhance NeoGenomics’ presence in the northeastern United States, a region where the company previously had limited penetration. By acquiring Pathline, NeoGenomics gains access to a laboratory that is certified by CLIA, CAP, and NYS, which will allow them to improve their testing capabilities and reduce turnaround times for flow testing. This is crucial as competitive pressures demand faster results, and the acquisition facilitates quicker service with dedicated courier pickups.
Moreover, the acquisition is anticipated to be accretive to EBITDA by fiscal year 2026, despite Pathline’s current gross margins being below NeoGenomics’ average. The strategic move is seen as a cost-effective way to expand their laboratory infrastructure, as building a new lab would have been more expensive. Additionally, the acquisition opens up significant revenue opportunities in the northeastern market, which accounts for a substantial portion of U.S. cancer cases. These factors collectively contribute to Souda’s positive outlook on NeoGenomics’ stock.
According to TipRanks, Souda is an analyst with an average return of -14.1% and a 27.88% success rate. Souda covers the Healthcare sector, focusing on stocks such as Illumina, Natera, and Castle Biosciences.
In another report released on March 11, TD Cowen also maintained a Buy rating on the stock with a $19.00 price target.