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NeoGenomics (NEO)
NASDAQ:NEO
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NeoGenomics
(NASDAQ:NEO)52Neutral
Positive Factors
Future Prospects
NEO expects to launch its new NEO Pan Tracer liquid biopsy (therapy selection) blood test panel in 1H'25 which may be additive to growth.
Growth Opportunities
NGS led the way with more than 40% year-over-year growth, showcasing strong performance in a high-growth market.
Negative Factors
Leadership Change
Shares of NEO have pulled back by ~30% following the surprising news that the company's CEO, Chris Smith, will leave both the CEO seat and the Board.
NeoGenomics (NEO) vs. S&P 500 (SPY)
Market Cap
$1.28B
Dividend YieldN/A
Average Volume (3M)1.10M
Price to Earnings (P/E)―
Beta (1Y)1.58
Revenue Growth11.65%
EPS Growth11.33%
CountryUS
Employees2,100
SectorHealthcare
Sector Strength74
IndustryMedical Diagnostics & Screening
Share Statistics
EPS (TTM)-0.62
Shares Outstanding128,461,380
10 Day Avg. Volume1,417,592
30 Day Avg. Volume1,095,057
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)1.86
Price to Cash Flow (P/CF)31.40
P/FCF Ratio31.40
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$18.50Price Target Upside98.07% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering13
NeoGenomics Business Overview & Revenue Model
Company DescriptionNeoGenomics, Inc. is a leading cancer diagnostics and pharmaceutical services company providing comprehensive testing services to hospitals, pathologists, oncologists, and other healthcare providers across the United States. The company specializes in cancer genetics testing and information services, offering a broad menu of diagnostic tests that include cytogenetics, flow cytometry, FISH, IHC, and molecular testing. It aims to improve patient care through high-quality genetic and molecular testing services, enabling a better understanding of cancer and patient outcomes.
How the Company Makes MoneyNeoGenomics generates revenue primarily through its clinical services and pharma services segments. The clinical services segment provides cancer diagnostic testing to healthcare providers, with revenue coming from the fees charged for each test. This includes a wide array of testing services such as oncology-focused tests that diagnose and monitor cancer, as well as genetic tests that help in understanding the cancer's profile. The pharma services segment caters to pharmaceutical companies and research institutions, providing services such as clinical trial testing, research, and development support. Revenue in this segment is derived from contractual agreements with pharmaceutical firms for services like biomarker discovery, clinical trial support, and companion diagnostic development. Key factors contributing to their earnings include the growing demand for personalized medicine and targeted therapies in oncology, partnerships with leading pharmaceutical companies, and a robust portfolio of proprietary and exclusive tests.
NeoGenomics Financial Statement Overview
Summary
NeoGenomics exhibits solid revenue growth but faces challenges in achieving profitability and positive cash flow. The balance sheet is relatively strong, but leverage and ongoing losses are areas of concern. The company needs to focus on improving operational efficiency and cash flow generation to enhance its financial health.Income Statement
NeoGenomics has shown consistent revenue growth over the years, with a significant increase from $408.8 million in 2019 to $660.6 million in 2024. However, the company has struggled with profitability, consistently reporting negative EBIT and net income in recent years. The gross profit margin has remained relatively stable, indicating efficient cost management, but the net profit margin remains negative due to high operating costs.55
Neutral
Balance Sheet
The balance sheet shows a stable financial position with a significant equity base, as evidenced by a healthy equity ratio. However, the debt-to-equity ratio indicates moderate leverage, which could pose a risk if not managed carefully. Return on equity has been negative in recent years due to ongoing net losses.60
Neutral
Cash Flow
Cash flows have been a challenge, with negative free cash flow in recent years, although there's an improving trend in operating cash flow. The company has struggled to convert net income into positive cash flow, impacting its financial flexibility.50
Neutral
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 660.57M | 591.64M | 509.73M | 484.33M | 444.45M | Gross Profit |
| 290.10M | 244.60M | 187.90M | 187.06M | 185.89M | EBIT |
| -92.11M | -107.74M | -153.11M | -9.99M | -2.13M | EBITDA |
| -1.51M | -17.61M | -78.63M | 52.08M | 34.85M | Net Income Common Stockholders |
| -78.73M | -87.97M | -144.25M | -8.35M | 4.17M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 386.84M | 415.20M | 437.99M | 515.39M | 296.26M | Total Assets |
| 1.64B | 1.68B | 1.74B | 1.87B | 988.33M | Total Debt |
| 605.33M | 611.68M | 610.93M | 612.79M | 218.22M | Net Debt |
| 238.32M | 269.19M | 347.75M | 295.96M | -10.49M | Total Liabilities |
| 735.70M | 739.69M | 742.01M | 761.50M | 294.04M | Stockholders Equity |
| 902.34M | 941.54M | 998.02M | 1.11B | 694.29M |
| Cash Flow | Free Cash Flow | |||
| -34.04M | -30.70M | -96.88M | -90.86M | -27.64M | Operating Cash Flow |
| 7.02M | -1.95M | -65.99M | -26.72M | 1.46M | Investing Cash Flow |
| 12.86M | 76.71M | 517.00K | -632.37M | -159.44M | Financing Cash Flow |
| 4.65M | 4.55M | 11.83M | 725.28M | 235.60M |
NeoGenomics Technical Analysis
Negative
9.34
Price Trends
14.24
Negative
14.85
Negative
14.91
Negative
Market Momentum
-1.36
Positive
23.64
Positive
7.04
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For NEO, the sentiment is Negative. The current price of 9.34 is below the 20-day moving average (MA) of 12.17, below the 50-day MA of 14.24, and below the 200-day MA of 14.91, indicating a bearish trend. The MACD of -1.36 indicates Positive momentum. The RSI at 23.64 is Positive, neither overbought nor oversold. The STOCH value of 7.04 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for NEO.
NeoGenomics Risk Analysis
NeoGenomics disclosed 37 risk factors in its most recent earnings report. NeoGenomics reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
NeoGenomics Peers Comparison
Overall Rating
UnderperformOutperform
Sector (49)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
74 Outperform | $8.23B | 101.80 | 2.63% | ― | 0.62% | -72.32% | |
53 Neutral | $8.83B | ― | -42.83% | ― | 10.37% | -389.98% | |
53 Neutral | $5.12B | ― | 312.48% | ― | 31.04% | 16.91% | |
52 Neutral | $1.28B | ― | -8.72% | ― | 11.65% | 11.33% | |
49 Neutral | $7.05B | 0.34 | -55.09% | 2.46% | 25.27% | -3.43% | |
49 Neutral | $13.45B | ― | -51.54% | ― | -2.93% | -4.69% | |
48 Neutral | $7.11B | ― | -28.07% | ― | -3.92% | -202.80% |
* Healthcare Sector Average
Performance Comparison
NEO
NeoGenomics
9.34
-6.44
-40.81%
BIO
Bio-Rad Laboratories
250.50
-82.75
-24.83%
EXAS
Exact Sciences
48.78
-7.49
-13.31%
ILMN
Illumina
84.89
-46.43
-35.36%
QGEN
Qiagen
37.82
-6.16
-14.01%
GH
Guardant Health
41.48
23.02
124.70%
NeoGenomics Earnings Call Summary
Earnings Call Date: Feb 18, 2025 | % Change Since: -35.23% | Next Earnings Date: May 6, 2025
Earnings Call Sentiment Positive
NeoGenomics demonstrated strong revenue growth and financial improvement, particularly in its NGS segment and adjusted EBITDA. However, challenges in the pharma segment and ongoing legal issues with RaDaR tempered the overall positive performance.Highlights
Consistent Revenue Growth
NeoGenomics reported revenue growth for nine consecutive quarters, reaching $172 million in Q4 2024, representing an 11% increase over the prior year.
Significant Improvement in Adjusted EBITDA
Adjusted EBITDA improved from a negative $48 million in 2022 to a positive $40 million in 2024, with a 27% improvement in Q4 2024 alone.
Growth in NGS Testing
NGS revenue grew by 24% in Q4 and 34% for the full year, now representing over 30% of total revenue.
Gross Margin Expansion
Adjusted gross margins improved to 48% in Q4, the highest in five years.
Increased Patient Reach
NeoGenomics served nearly 700,000 patients in 2024, with a goal to reach 1 million annually by 2028.
Lowlights
Pharma Segment Challenges
The pharma segment saw a decline, attributed to a lack of expected year-end budget flush and limitations on selling new RaDaR contracts.
Legal Challenges with RaDaR
Ongoing litigation regarding RaDaR 1.1's alleged patent infringement, with a jury trial scheduled for October 2025.
Company Guidance
During the NeoGenomics Fourth Quarter and Full Year 2024 Financial Results Conference Call, the company provided guidance for 2025, highlighting expectations for full-year revenues between $735 million and $745 million, representing 11% to 13% growth. The adjusted EBITDA is projected to be between $55 million and $58 million, indicating an improvement of 38% to 45%. The company has been experiencing robust growth, with clinical testing volumes increasing by 9% and revenue per test rising by 5% compared to the prior year. NeoGenomics has grown revenue double-digits for nine consecutive quarters, with adjusted EBITDA turning from a negative $48 million in 2022 to a positive $40 million in 2024. The company's adjusted gross margins improved to 48%, the highest in 20 quarters, and they served nearly 700,000 patients in 2024. Looking ahead, they aim to achieve top-line growth of 12% to 13% annually and expect to serve 1 million patients annually by 2028.NeoGenomics Corporate Events
Executive/Board ChangesBusiness Operations and StrategyFinancial Disclosures
NeoGenomics Announces Executive Bonuses and Revenue Growth
Positive
Jan 15, 2025
On January 14, 2025, NeoGenomics announced it had awarded retention bonuses to key executives to reward and incentivize their performance. The bonuses, aimed at retaining Jeffrey Sherman, Melody Harris, and Warren Stone, include cash payments and restricted stock units, with vesting conditions linked to continued employment. The following day, NeoGenomics also provided its 2025 financial guidance, projecting revenue growth of 12-13% annually and expecting total revenues between $735 million to $745 million. The company plans to expand its leadership in oncology testing, enhance operational efficiencies, and achieve positive cash flow, reflecting its patient-centric strategy and focus on product innovation.
Executive/Board ChangesBusiness Operations and Strategy
NeoGenomics Announces CEO Transition and Leadership Change
Positive
Jan 10, 2025
NeoGenomics announced the retirement of CEO Chris Smith, effective April 1, 2025, who will continue as a special advisor. Tony Zook, an experienced healthcare executive, will succeed Smith as CEO, bringing expertise in commercial operations and strategic leadership. Under Smith’s leadership, NeoGenomics transformed significantly, achieving double-digit revenue growth and improving its financial position. Zook’s appointment is expected to sustain the company’s growth trajectory and reinforce its leadership in oncology testing.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.