Neo Performance Materials Inc (NEO) AI Stock Analysis

• Market Cap: C$824.91M
• Dividend Yield: 2.55%
• Average Volume (3M): 336.86K
• Price to Earnings (P/E): ―
• Beta (1Y): 1.73
• 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: 13.46% 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$20.00 ▲(0.86% Upside)

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

Adding scalable European magnet capacity establishes long-term manufacturing footprint near key OEMs, improving supply security for e-motor customers. Scaling to 5,000 t supports sustained volume growth, potential margin improvement from localized production and strengthens Neo's strategic position in EV supply chains.

Strategic partnership with Bosch

A formal expanded collaboration with a major OEM provides multi-year demand visibility and technical validation. This reduces commercial risk, accelerates qualification cycles, and supports predictable volume commitments that underpin capacity utilization and long-term revenue stability across automotive ramp cycles.

Chemicals & Oxides EBITDA surge

A 213% YoY EBITDA lift signals structural margin improvement from portfolio transformation and favorable pricing. Higher-margin chemicals diversify revenue mix, reduce reliance on commodity cycles, and enhance cash generation potential if sustained, supporting reinvestment and improving overall operational resilience.

Negative Factors

Weak cash conversion

Poor cash conversion and negative FCF growth constrain internal funding for expansions and capital needs, increasing reliance on external financing. Persistent inefficiency limits flexibility to invest in capacity, pay down debt, or return capital, raising medium-term liquidity and execution risks.

Low profitability margins

Slim EBIT margins and a negative net margin indicate ongoing operational challenges in converting revenue to profit. Without sustained margin expansion or cost discipline, ROE pressure and limited retained earnings hinder reinvestment and shareholder value creation over the next several quarters.

Rare Metals segment volatility

A 30% EBITDA decline from commodity price normalization highlights earnings sensitivity to metal price cycles. Such volatility can produce uneven segment contributions, complicate forecasting and capital allocation, and require stronger hedging or downstream integration to stabilize long-term margins.

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. faces financial challenges, particularly in profitability and cash flow management. The income statement shows a slight revenue growth but struggles with profitability. The balance sheet is stable with a manageable debt-to-equity ratio, but the negative return on equity is concerning. Cash flow metrics indicate significant inefficiencies. Overall, the company needs to improve operational efficiency and cash flow generation.

Income Statement

Neo Performance Materials Inc. shows a mixed performance in its income statement. The TTM data indicates a slight revenue growth of 2.27%, but the company is struggling with profitability, as evidenced by a negative net profit margin of -2.15%. The gross profit margin is moderate at 28.18%, but the EBIT margin is low at 1.88%, indicating challenges in operational efficiency. The company needs to improve its cost management and operational strategies to enhance profitability.

Balance Sheet

The balance sheet reflects a stable financial structure with a manageable debt-to-equity ratio of 0.23. However, the return on equity is negative at -2.54%, highlighting issues in generating returns for shareholders. The equity ratio is relatively healthy, suggesting a solid asset base. The company should focus on improving its profitability to enhance shareholder value.

Cash Flow

Cash flow analysis reveals significant challenges, with a negative free cash flow growth rate of -19.80% in the TTM period. The operating cash flow to net income ratio is low at 0.02, indicating inefficiencies in converting income into cash. The free cash flow to net income ratio is highly negative, suggesting difficulties in maintaining liquidity. The company needs to enhance its cash flow management to ensure sustainable operations.

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: 19.83
• 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 TSE:NEO, the sentiment is Positive. The current price of 19.83 is above the 20-day moving average (MA) of 19.26, above the 50-day MA of 17.60, and above the 200-day MA of 15.93, indicating a bullish trend. The MACD of 0.62 indicates Positive momentum. The RSI at 62.23 is Neutral, neither overbought nor oversold. The STOCH value of 59.81 is Neutral, 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	75 Outperform	C$2.47B	40.25	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$824.91M	-90.88	-1.61%	2.55%	8.04%	-195.66%
GMG	50 Neutral	C$261.45M	-27.37	-92.59%	―	6.29%	-3.71%
CNO	47 Neutral	C$15.53M	-4.82	-61.05%	―	-15.84%	-375.96%
IZ	45 Neutral	C$424.07K	100.00	―	―	109.13%	―
NANO	42 Neutral	C$112.71M	-7.55	-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.