Inotiv (NOTV) AI Stock Analysis

• Market Cap: $50.80M
• Dividend Yield: N/A
• Average Volume (3M): 892.33K
• Price to Earnings (P/E): ―
• Beta (1Y): 1.51
• Revenue Growth: -18.81%
• EPS Growth: -257.19%
• Country: US
• Employees: 1,977
• Sector: Healthcare
• Sector Strength: 69
• Industry: Medical - Diagnostics & Research
• EPS (TTM): -4.61
• Shares Outstanding: 33,869,270
• 10 Day Avg. Volume: 1,483,568
• 30 Day Avg. Volume: 892,333
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 0.20
• Price to Cash Flow (P/CF): -5.20
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $6.00
• Price Target Upside: 300.00% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 2

Inotiv is navigating a challenging financial landscape marked by declining revenues, operating losses, and liquidity pressures. While efforts to stabilize revenue and improve liquidity show promise, significant financial setbacks persist. The technical analysis further indicates bearish trends, and valuation remains challenged by ongoing losses. Despite positive strategic initiatives, the overall outlook remains cautious.

Positive Factors

Demand and Revenue Growth

Discovery orders increased by 16%, marking the first growth in this area in two years, which is expected to drive overall growth.

Financial Performance

AEBITDA exceeded expectations, indicating financial performance is stronger than anticipated.

Liquidity and Financial Strategy

The company maintains sufficient financial flexibility with $38M in cash and additional credit availability to support operations.

Negative Factors

Debt and Balance Sheet

The company still needs to de-lever its balance sheet as it has $393M of debt.

Research Model Demand

A material change in research model demand would impact Inotiv’s business.

Inotiv Business Overview & Revenue Model

Company Description

Inotiv, Inc. is a contract research organization (CRO) that provides a range of nonclinical and analytical drug discovery and development services to pharmaceutical, biotechnology, and medical device companies. Operating primarily in the preclinical sector, Inotiv offers services such as toxicology, pharmacology, metabolism, bioanalysis, and consulting services to support clients in the development of new drugs and therapies.

How the Company Makes Money

Inotiv makes money through its comprehensive suite of contract research services offered to pharmaceutical, biotechnology, and medical device companies. The company's revenue model is primarily based on fee-for-service contracts, where clients pay for specific preclinical research services, including toxicology studies, pharmacokinetics, pharmacodynamics, and safety assessments. Key revenue streams include long-term research projects, short-term studies, and consulting services tailored to client needs. Inotiv's earnings are significantly influenced by the demand for drug discovery and development services, strategic partnerships with industry players, and its ability to deliver high-quality, reliable research outcomes that expedite the drug development process for its clients.

Inotiv Financial Statement Overview

Summary

Inotiv's financial performance is weak, with declining revenue, persistent losses, and negative cash flow trends. The income statement shows a negative net profit margin and revenue growth decline. The balance sheet indicates high leverage and negative return on equity, while cash flow analysis shows liquidity pressures and reliance on external funding.

Income Statement

Inotiv's recent performance reveals a challenging financial trajectory, with declining revenue and persistent losses. The TTM data shows a negative net profit margin of -25.9% and a gross profit margin of 38.6%, indicating pressure on profitability. Revenue growth has also been negative, reflecting a 17.9% decrease in the latest annual report. These indicators point to difficulties in maintaining top-line growth and controlling costs.

Balance Sheet

The balance sheet reflects significant financial leverage with a debt-to-equity ratio of 0.07 in the TTM period, which, while improved, indicates a history of high leverage. The equity ratio stands at 22.0%, suggesting potential risks if liabilities continue to rise. The return on equity remains negative, highlighting ongoing profitability challenges.

Cash Flow

Cash flow analysis indicates negative operating cash flow and free cash flow, underscoring liquidity pressures. The free cash flow growth rate is negative, and the operating cash flow to net income ratio is unfavorable, both pointing to cash generation issues. The company's financing strategy has relied on external funding, which poses sustainability concerns.

Breakdown
TTM	Sep 2024	Sep 2023	Sep 2022	Sep 2021	Sep 2020
Income Statement		Total Revenue
475.11M	490.74M	572.42M	547.66M	89.61M	60.47M
	Gross Profit
88.58M	111.17M	165.44M	157.21M	30.16M	18.24M
	EBIT
-89.84M	-86.41M	-81.46M	-27.45M	1.53M	-3.06M
	EBITDA
-32.63M	-26.76M	-26.51M	-273.42M	15.37M	1.03M
	Net Income Common Stockholders
-120.69M	-108.44M	-105.14M	-337.26M	10.89M	-4.68M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
1.72M	21.43M	35.49M	18.52M	138.92M	1.41M
	Total Assets
30.34M	781.36M	856.53M	962.90M	321.86M	61.59M
	Total Debt
11.86M	15.31M	417.64M	386.49M	174.19M	36.41M
	Net Debt
10.14M	-6.12M	382.15M	367.98M	35.27M	35.01M
	Total Liabilities
19.84M	610.86M	588.04M	603.13M	216.73M	54.00M
	Stockholders Equity
10.50M	170.50M	269.15M	360.37M	105.13M	7.60M
Cash Flow		Free Cash Flow
-25.95M	-29.11M	380.00K	-41.52M	-1.73M	-4.91M
	Operating Cash Flow
-4.76M	-6.80M	27.88M	-5.22M	10.75M	1.29M
	Investing Cash Flow
-17.25M	-16.83M	-28.75M	-333.72M	-54.06M	-10.13M
	Financing Cash Flow
38.72M	9.68M	15.87M	203.15M	198.83M	9.64M

Inotiv Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 1.50
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For NOTV, the sentiment is Negative. The current price of 1.5 is below the 20-day moving average (MA) of 2.52, below the 50-day MA of 3.11, and below the 200-day MA of 2.74, indicating a bearish trend. The MACD of -0.31 indicates Positive momentum. The RSI at 40.52 is Neutral, neither overbought nor oversold. The STOCH value of 17.34 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for NOTV.

Inotiv Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
MEDP	77 Outperform	$9.00B	23.56	58.41%	―	11.84%	42.04%
IQV	74 Outperform	$25.25B	19.42	22.55%	―	2.95%	2.46%
LH	68 Neutral	$18.29B	24.73	9.37%	1.30%	0.83%	89.55%
CRL	59 Neutral	$4.91B	388.89	0.45%	―	-1.92%	-96.95%
ICON	55 Neutral		―	12.60%	―	―	―
Sector *	48 Neutral	$6.35B	1.19	-46.26%	2.67%	19.24%	1.75%
NOTV	40 Underperform	$50.80M	―	-56.93%	―	-18.81%	-257.19%

Inotiv Corporate Events

Inotiv Shareholders Approve Key Governance Decisions

On March 13, 2025, Inotiv held its annual meeting of shareholders, where key decisions were made regarding the company’s governance and operational strategies. Two Class I board members were elected for a three-year term, Ernst & Young LLP was ratified as the independent auditor for fiscal 2025, and the compensation of named executive officers was approved. Additionally, shareholders voted to hold advisory votes on executive compensation every three years, and the 2024 Plan Amendment was approved.