Neogen (NEOG) AI Stock Analysis

• Market Cap: $2.43B
• Dividend Yield: N/A
• Average Volume (3M): 2.91M
• Price to Earnings (P/E): ―
• Beta (1Y): 1.23
• Revenue Growth: -2.77%
• EPS Growth: -4327.53%
• Country: US
• Employees: 2,917
• Sector: Healthcare
• Sector Strength: 45
• Industry: Medical - Diagnostics & Research
• EPS (TTM): 0.10
• Shares Outstanding: 217,525,990
• 10 Day Avg. Volume: 2,331,116
• 30 Day Avg. Volume: 2,909,770
• PEG Ratio: >-0.01
• Price to Book (P/B): 0.61
• Price to Sales (P/S): 1.42
• P/FCF Ratio: -27.42
• Enterprise Value/Market Cap: 1.27
• Enterprise Value/Revenue: 3.49
• Enterprise Value/Gross Profit: 9.17
• Enterprise Value/Ebitda: -7.09
• 1Y Price Target: $10.67
• Price Target Upside: -4.30% Downside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 4
• EPS Forecast (FY): 0.35
• Revenue Forecast (FY): $850.58M

• Rating: 56 Neutral
• Price Target: $11.50 ▲(3.14% Upside)
• Action: Reiterated Date: 01/09/26
• Date: Action: Reiterated 01/09/26

The score is held back primarily by weakened financial performance (losses and margin compression) and valuation limits from a negative P/E. Offsetting factors include constructive earnings-call momentum with raised guidance and improving margins/cost actions, plus a strong technical uptrend, though overbought readings add near-term risk.

Positive Factors

Recurring consumables revenue model

Neogen’s core business sells consumable test kits, media/reagents, sampling devices and monitoring products that are purchased routinely by food processors, labs and animal producers. This installed-base, repeat-purchase model generates durable, predictable revenue streams tied to regulatory and quality programs, supporting long-term cash visibility and upsell of instruments and services.

Margin improvement and raised guidance

Management reported sequential margin expansion, raised full-year revenue and adjusted EBITDA guidance, and implemented ~$20M of annualized cost savings. These actions indicate operational leverage and disciplined cost management are starting to restore profitability, which if sustained underpins higher margin structural performance over the coming quarters.

Improving cash generation

Operating cash flow has recovered and free cash flow turned positive on a TTM basis, with quarter-to-quarter improvement noted. Positive cash generation increases flexibility to fund routine capex (~3–4% of revenue), pay down debt, and support integrations like Petrifilm, making the company less reliant on external financing if the trend persists.

Negative Factors

Elevated leverage ($800M gross debt)

With nearly $800M gross debt, leverage materially constrains financial flexibility and raises refinancing and covenant risk if operating performance slips. Even with partial paydown, high debt increases interest burden and prioritizes deleveraging over growth investments, making execution and cash conversion critical to restoring balance-sheet strength over the medium term.

Revenue and gross-margin deterioration

Recent income-statement trends show weakening revenue and substantial gross-margin compression, reflecting mix shifts, pricing pressure, or cost absorption shortfalls. Sustained margin erosion reduces the company’s ability to generate returns on invested capital and to self-fund strategic initiatives, making profitability recovery and structural margin fixes essential to long-term value creation.

Operational execution drags

Ongoing operational problems—losses in sample collection, multi-quarter inventory scrappage, and revenue headwinds from divestitures—directly depress margins and cash. These execution items lengthen the timeline to integrate acquisitions (e.g., Petrifilm) and to realize cost savings, increasing execution risk and making near-term earnings less reflective of core ambitions until resolved.

Neogen Business Overview & Revenue Model

Company Description

Neogen Corporation, together with its subsidiaries, develops, manufactures, and markets various products for food and animal safety worldwide. It operates through two segments, Food Safety and Animal Safety. The Food Safety segment offers diagnostic test kits and related products to detect dangerous and unintended substances in food and animal feed, including foodborne pathogens, spoilage organisms, natural toxins, food allergens, genetic modifications, ruminant by-products, meat speciation, drug residues, pesticide residues, and general sanitation concerns; and AccuPoint Advanced rapid sanitation test to detect the presence of adenosine triphosphate, a chemical found in living cells. This segment offers its products primarily to food and feed producers and processors; grain producers and processors; producers of cookies, crackers, candy, ice cream, and other processed foods; meat and poultry processors, seafood processors, fruit and vegetable producers, and dairies; laboratories; and producers of pharmaceuticals, cosmetics, and veterinary vaccines. The Animal Safety segment provides veterinary instruments, pharmaceuticals, vaccines, topicals, parasiticides, diagnostic products, rodenticides, cleaners, disinfectants, insecticides, and genomics testing services for the animal safety market. This segment offers various products for researchers to detect biologically active substances. Its drug detection immunoassay test kits are used for the detection of abused and therapeutic drugs in farm and racing animals; detection of drug residues in meat and meat products; and human forensic toxicology drug screening applications. In addition, this segment's products are used to maintain sanitary conditions and limit the potential hazards of bacteria, fungi, and viruses. Neogen Corporation was incorporated in 1981 and is headquartered in Lansing, Michigan.

How the Company Makes Money

Neogen generates revenue through multiple key streams within its Food Safety and Animal Safety segments. The Food Safety division primarily earns money by selling diagnostic tests, food safety products, and equipment used to detect contaminants and pathogens in food products. This includes tests for pathogens like Salmonella and E. coli, as well as allergen testing kits. The Animal Safety segment generates revenue through the sale of veterinary pharmaceuticals, supplements, and diagnostic tests for livestock and pets. Additionally, Neogen benefits from recurring revenue through the sale of consumables used in its testing products and services. Significant partnerships with food manufacturers, agricultural producers, and veterinary practices bolster its revenue, as these collaborations often lead to long-term contracts and increased product adoption. Furthermore, the company's investments in research and development facilitate the introduction of new products, enhancing its market presence and driving further sales.

Neogen Financial Statement Overview

Summary

Income statement trends are weak with meaningful deterioration in revenue and a swing to significant losses alongside gross margin compression. The balance sheet is mixed—equity provides some cushion, but leverage has risen and returns are deeply negative. Cash flow is a relative bright spot with positive operating cash flow and free cash flow turning positive in TTM, but consistency remains a concern versus the size of losses.

Income Statement

Results have deteriorated meaningfully. Revenue is slightly down in the most recent annual period and sharply lower in TTM (Trailing-Twelve-Months) versus the prior year, while profitability has swung from modestly positive operating performance (2023–2024) to significant losses in 2025 and TTM. Gross margin has also compressed from ~50% (2023–2024) to ~38% in TTM, indicating weaker pricing, mix, or cost absorption. Strength: the business historically showed solid growth and healthy gross margins, but current loss levels and negative margins dominate the near-term outlook.

Balance Sheet

Balance sheet support is mixed. Equity remains sizable relative to total assets, which provides some cushioning, but leverage increased materially from 2021–2022 to 2023–2025 with total debt now near $0.8–$0.9B. Returns on equity are deeply negative in 2025 and TTM (Trailing-Twelve-Months), reflecting that the capital base is not currently generating profits. Strength: the company is not showing an extreme debt load relative to equity in recent annual periods, but the earnings decline raises risk that leverage becomes more burdensome if losses persist.

Cash Flow

Cash generation is better than reported earnings but still uneven. Operating cash flow is positive across periods and improved in TTM (Trailing-Twelve-Months), and free cash flow turned positive in TTM after being negative in 2023–2025 annual periods. However, free cash flow has been volatile and recently declined sharply on a growth basis, and cash flow is not consistently strong enough to offset the magnitude of net losses. Strength: positive operating cash flow provides some flexibility, but the inconsistency in free cash flow is a key watch item.

Breakdown	TTM	May 2025	May 2024	May 2023	May 2022	May 2021
Income Statement
Total Revenue	880.32M	894.66M	924.22M	822.45M	527.16M	468.46M
Gross Profit	334.96M	421.38M	462.63M	405.95M	243.01M	215.06M
EBITDA	-433.71M	-937.75M	182.60M	122.30M	83.90M	96.31M
Net Income	-602.74M	-1.09B	-9.42M	-22.87M	48.31M	60.88M
Balance Sheet
Total Assets	3.36B	3.44B	4.55B	4.55B	992.93M	920.19M
Cash, Cash Equivalents and Short-Term Investments	145.34M	129.00M	170.94M	245.57M	381.05M	381.09M
Total Debt	792.93M	912.61M	906.24M	897.53M	0.00	1.29M
Total Liabilities	1.26B	1.37B	1.40B	1.42B	105.56M	79.81M
Stockholders Equity	2.10B	2.07B	3.14B	3.13B	887.37M	840.38M
Cash Flow
Free Cash Flow	17.20M	-46.35M	-76.16M	-24.73M	43.61M	54.38M
Operating Cash Flow	66.20M	58.24M	35.26M	41.03M	68.04M	81.09M
Investing Cash Flow	37.68M	-99.19M	-29.31M	201.04M	-97.23M	-105.56M
Financing Cash Flow	-101.01M	-1.60M	1.92M	-118.08M	6.81M	33.54M

Neogen Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 11.15
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For NEOG, the sentiment is Positive. The current price of 11.15 is above the 20-day moving average (MA) of 10.90, above the 50-day MA of 9.49, and above the 200-day MA of 6.63, indicating a bullish trend. The MACD of 0.49 indicates Positive momentum. The RSI at 66.49 is Neutral, neither overbought nor oversold. The STOCH value of 69.29 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for NEOG.

Neogen Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
NEOG	56 Neutral	$2.43B	-4.01	-25.25%	―	-2.77%	-4327.53%
GRAL	54 Neutral	$2.05B	-4.71	-16.07%	―	20.53%	82.91%
NEO	52 Neutral	$1.23B	-11.26	-12.42%	―	10.10%	-44.29%
Sector *	51 Neutral	$7.86B	-0.30	-43.30%	2.27%	22.53%	-2.21%
FLGT	49 Neutral	$443.47M	-7.22	-5.39%	―	13.60%	74.64%
MYGN	48 Neutral	$468.48M	-1.27	-68.45%	―	0.21%	-233.51%
OPK	46 Neutral	$941.24M	-4.10	-17.14%	―	-9.75%	-31.28%