Neo Performance Materials Inc (NEO) AI Stock Analysis

• Market Cap: C$653.52M
• Dividend Yield: 2.55%
• Average Volume (3M): 336.86K
• Price to Earnings (P/E): ―
• Beta (1Y): 1.77
• Revenue Growth: 8.04%
• EPS Growth: -195.66%
• Country: CA
• Employees: 1,773
• Sector: Basic Materials
• Sector Strength: 58
• Industry: Chemicals - Specialty
• EPS (TTM): 0.26
• Shares Outstanding: 41,598,854
• 10 Day Avg. Volume: 633,430
• 30 Day Avg. Volume: 336,861
• PEG Ratio: -0.32
• Price to Book (P/B): 0.59
• Price to Sales (P/S): 0.50
• P/FCF Ratio: -18.82
• 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: C$22.50
• Price Target Upside: 43.22% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 1
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 50 Neutral
• Price Target: C$15.50 ▼(-1.34% Downside)

Neo Performance Materials Inc. has a mixed outlook. The most significant factor is the financial performance, which faces challenges in profitability and cash flow management. Technical analysis indicates bearish momentum, further weighing on the stock. Valuation metrics are unattractive, with a negative P/E ratio. However, the positive earnings call highlights strategic advancements and growth, providing some optimism. Overall, the stock score reflects these mixed signals, with financial and technical weaknesses being the most impactful.

Positive Factors

Strategic Partnerships

The partnership with Bosch enhances Neo's market position in advanced materials, providing long-term revenue stability and access to cutting-edge technology applications.

Facility Expansion

The new facility increases production capacity, meeting high demand and supporting growth in the renewable energy and automotive sectors, strengthening Neo's competitive edge.

Revenue Growth

Consistent EBITDA growth reflects strong operational performance and effective cost management, positioning Neo for sustained financial health.

Negative Factors

Profitability Challenges

Persistent profitability issues indicate challenges in cost management and operational efficiency, potentially impacting long-term financial stability.

Cash Flow Inefficiencies

Poor cash flow conversion limits Neo's ability to reinvest in growth opportunities and manage debt, posing risks to financial flexibility.

Rare Metals Segment Decline

Declining performance in the Rare Metals segment suggests vulnerability to price fluctuations, impacting overall profitability and market competitiveness.

Neo Performance Materials Inc Business Overview & Revenue Model

Company Description

Neo Performance Materials Inc. manufactures and sells rare earth, magnetic powders, magnets, and rare metal-based functional materials in Canada and internationally. The company operates in three segments: Magnequench, Chemicals and Oxides, and Rare Metals. The Magnequench segment produces magnetic powders that are used in bonded and hot deformed fully dense neodymium-iron-boron magnets. Its powders are used in the production of bonded permanent magnets that are components in automotive motors, micro motors, traction motors, sensors, and other applications. The Chemicals and Oxides segments manufactures and distributes a range of industrial materials for use in auto catalysts, petroleum refining and other chemical catalysts, magnets, hybrid and electric vehicles, water treatment, consumer electronics, and other applications. The Rare Metals segment sources, produces, reclaims, refines, and markets high-temperature metals that include tantalum, niobium, hafnium, and rhenium; and electronic metals, such as gallium and indium. Its products are applied in super alloys for jet engines, medical imaging, wireless technologies, and LED lightings, as well as flat panel displays, solar, steel additives, batteries, and electronic applications. The company was founded in 1994 and is headquartered in Toronto, Canada.

How the Company Makes Money

Neo Performance Materials generates revenue primarily through the sale of its advanced materials and rare earth products. The company's revenue model is built on several key streams, including direct sales to manufacturers in the automotive, electronics, and clean technology sectors. NEO also benefits from long-term supply agreements and contracts with strategic partners, which provide stable revenue sources. Additionally, the company engages in value-added services such as material processing and recycling, which further contribute to its earnings. Factors such as the growing demand for electric vehicles and renewable energy technologies, as well as geopolitical dynamics affecting rare earth supply chains, play a significant role in enhancing NEO's profitability.

Neo Performance Materials Inc Financial Statement Overview

Summary

Neo Performance Materials Inc. shows a mixed financial performance. While the balance sheet is stable with low leverage, the company faces significant challenges in profitability and cash flow management, as indicated by negative net profit margins and free cash flow.

Income Statement

Neo Performance Materials Inc. shows a mixed performance in its income statement. The TTM data reveals a slight revenue growth of 1.5%, but the company is struggling with profitability, as indicated by a negative net profit margin of -3.2%. The gross profit margin is moderate at 27.2%, suggesting some efficiency in production. However, the EBIT and EBITDA margins are low, indicating challenges in managing operating expenses.

Balance Sheet

The balance sheet reflects a stable financial position with a low debt-to-equity ratio of 0.18, indicating conservative leverage. However, the return on equity is negative at -3.7%, pointing to inefficiencies in generating returns for shareholders. The equity ratio is strong, suggesting a solid capital structure.

Cash Flow

Cash flow analysis shows significant challenges, with negative free cash flow and a high free cash flow to net income ratio of -1.65, indicating cash flow issues relative to earnings. The operating cash flow to net income ratio is low at 0.17, reflecting difficulties in converting income into cash.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	493.43M	475.83M	571.54M	640.30M	539.25M	346.69M
Gross Profit	146.18M	123.96M	108.73M	149.37M	150.53M	80.33M
EBITDA	33.21M	24.54M	23.67M	59.05M	57.99M	18.29M
Net Income	-5.88M	-12.95M	-8.44M	25.95M	35.18M	-61.15M
Balance Sheet
Total Assets	921.78M	653.25M	627.00M	676.46M	594.08M	486.54M
Cash, Cash Equivalents and Short-Term Investments	85.54M	85.49M	86.89M	147.49M	89.04M	72.22M
Total Debt	88.83M	71.40M	29.42M	50.00M	9.48M	5.97M
Total Liabilities	359.44M	248.37M	191.69M	198.82M	163.57M	123.06M
Stockholders Equity	403.70M	402.17M	432.15M	474.45M	427.63M	362.00M
Cash Flow
Free Cash Flow	-44.26M	-12.67M	19.88M	-13.77M	-11.63M	2.46M
Operating Cash Flow	-5.12M	51.53M	61.62M	3.70M	-2.16M	10.07M
Investing Cash Flow	-16.73M	-59.42M	-59.12M	-17.43M	-7.01M	-7.36M
Financing Cash Flow	9.77M	13.12M	-62.04M	74.79M	26.20M	-17.91M

Neo Performance Materials Inc Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 15.71
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:NEO, the sentiment is Negative. The current price of 15.71 is below the 20-day moving average (MA) of 16.44, below the 50-day MA of 17.48, and above the 200-day MA of 14.48, indicating a neutral trend. The MACD of -0.42 indicates Positive momentum. The RSI at 41.39 is Neutral, neither overbought nor oversold. The STOCH value of 17.46 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TSE:NEO.

Neo Performance Materials Inc Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
VNP	71 Outperform	C$1.66B	26.25	26.65%	―	30.36%	181.15%
Sector *	61 Neutral	$10.43B	7.12	-0.05%	2.87%	2.86%	-36.73%
BOS	53 Neutral	C$121.63M	-23.80	-2.95%	3.12%	5.06%	93.02%
GMG	52 Neutral	C$196.68M	-20.84	-92.59%	―	6.29%	-3.71%
NEO	50 Neutral	C$653.52M	-71.81	-1.61%	2.55%	8.04%	-195.66%
ECO	49 Neutral	C$232.95M	-206.74	-2.11%	―	30.76%	52.23%
NANO	45 Neutral	C$126.74M	-8.66	-64.59%	―	―	56.03%

Neo Performance Materials Inc Corporate Events

Neo Performance Materials Reports Strong Q3 2025 Results and Expands European Operations

Neo Performance Materials Inc. reported strong third-quarter financial results for 2025, with a notable increase in Adjusted EBITDA and an upward revision of its full-year guidance. The company achieved significant milestones, including the opening of a new permanent magnet plant in Europe and securing key contracts, positioning itself as a crucial player in the localized supply chains for permanent magnets, which are essential for electrification and sustainability efforts.

Neo Performance Materials to Announce Q3 2025 Financial Results

Neo Performance Materials Inc. announced that it will release its third-quarter 2025 financial results on November 14, 2025, before the Toronto market opens. This announcement is significant as it provides stakeholders with insights into the company’s financial health and operational performance, potentially impacting its market positioning and investor relations.

Neo Performance Materials Opens New Magnet Facility in Estonia

Neo Performance Materials Inc. has inaugurated a new permanent magnet manufacturing facility in Narva, Estonia, marking a significant step in establishing a European presence to supply critical components for the energy transition. This facility, co-funded by the European Union, is expected to satisfy up to 15% of the EU’s magnet demand, supporting the electric vehicle and wind energy sectors. Neo has also extended its strategic partnership with Bosch, ensuring a stable supply chain and fostering localized production.

Neo Performance Materials Strengthens Partnership with Bosch for Magnet Production

Neo Performance Materials Inc. has extended its strategic partnership with Bosch through a multi-year Memorandum of Understanding, securing significant annual magnet production capacity for Bosch. This collaboration aims to enhance supply chain stability and foster localized production, positioning Neo as a key supplier for automotive and other applications. The partnership is a critical step in Neo’s strategy to build a resilient supply chain and optimize its manufacturing capabilities, particularly in its Estonian facility, reinforcing its role as a preferred supplier for major global companies.