Neo Performance Materials Inc (NEO) AI Stock Analysis

• Market Cap: C$797.87M
• Dividend Yield: 2.55%
• Average Volume (3M): 336.86K
• Price to Earnings (P/E): ―
• Beta (1Y): 1.81
• 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: 17.31% 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$19.00 ▼(-0.94% 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

European permanent magnet facility & Bosch partnership

Opening a 2,000 tpa European permanent magnet facility (scalable to 5,000 tpa) and an expanded Bosch partnership strengthens Neo's strategic position in local EV/industrial supply chains. It secures long-term demand, shortens lead times, and raises customer qualification barriers, improving durable revenue visibility and competitive moat.

Magnequench volume and margin expansion

Sustained volume growth and rising adjusted EBITDA at Magnequench indicate durable product demand and operational leverage in a core magnetics business. Higher volumes support fixed-cost absorption and margin resilience, enhancing long-term cash generation potential tied to structural electrification trends.

Manageable leverage and solid equity base

A low debt-to-equity ratio gives Neo financial flexibility to fund capacity expansions, absorb commodity cycles, and invest in qualifying customers without over-reliance on external financing. This conservatism supports durable capital allocation and lowers bankruptcy risk during cyclical downturns.

Negative Factors

Negative profitability and thin operating margins

Persistently low EBIT margins and a negative net profit margin limit Neo's ability to internally fund growth and reduce shareholder returns. Until cost structure or pricing power improves, profitability shortfalls will constrain reinvestment, make returns sensitive to price cycles, and hinder long-term value creation.

Weak cash conversion and declining free cash flow

Severely impaired cash conversion and negative FCF growth reduce liquidity and increase dependence on external funding for capex and working capital. This structural cash flow inefficiency constrains strategic flexibility, elevates financing costs, and risks slowing capacity buildouts or margin-improvement initiatives.

Exposure to rare metals price volatility

Significant EBITDA decline in Rare Metals after price normalization highlights sensitivity to commodity cycles. This exposure can produce material earnings volatility, complicating forecasting and undermining steady cash flows, especially if a sizable portion of revenue remains tied to fluctuating rare metal prices.

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: Positive
• Last Price: 19.18
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:NEO, the sentiment is Positive. The current price of 19.18 is above the 20-day moving average (MA) of 16.88, above the 50-day MA of 16.79, and above the 200-day MA of 15.11, indicating a bullish trend. The MACD of 0.59 indicates Negative momentum. The RSI at 68.17 is Neutral, neither overbought nor oversold. The STOCH value of 82.71 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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$1.80B	29.40	26.65%	―	30.36%	181.15%
Sector *	61 Neutral	$10.43B	7.12	-0.05%	2.87%	2.86%	-36.73%
NEO	50 Neutral	C$797.87M	-87.90	-1.61%	2.55%	8.04%	-195.66%
GMG	49 Neutral	C$328.58M	-34.40	-92.59%	―	6.29%	-3.71%
CNO	47 Neutral	C$17.78M	-12.37	-61.05%	―	-15.84%	-375.96%
IZ	45 Neutral	C$424.07K	100.00	―	―	109.13%	―
NANO	42 Neutral	C$118.82M	-8.35	-64.59%	―	―	56.03%

Neo Performance Materials Inc Corporate Events

Neo Performance Materials Settles European Patent Dispute With Rhodia

Neo Performance Materials has reached a settlement with Rhodia Opérations, a Solvay subsidiary, resolving long-running litigation over a series of European patents related to its automotive catalyst products. Under the agreement, Neo will pay €7.1 million in the first quarter of 2026, with all parties mutually releasing claims and withdrawing outstanding court proceedings, and the company emphasized that most of the patents involved have already expired and that the settlement has been largely provisioned for, meaning it does not expect any material impact on earnings or constraints on ongoing sales, thereby removing a legal overhang without altering its operational or competitive position in the automotive catalyst market.

The most recent analyst rating on (TSE:NEO) stock is a Hold with a C$15.50 price target. To see the full list of analyst forecasts on Neo Performance Materials Inc stock, see the TSE:NEO Stock Forecast page.

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.

The most recent analyst rating on (TSE:NEO) stock is a Hold with a C$17.50 price target. To see the full list of analyst forecasts on Neo Performance Materials Inc stock, see the TSE:NEO Stock Forecast page.