Neogen Stock Forecast: Downturn Following Q1 Revenue Miss

Shares of Neogen stock (NEOG:NSD) are experiencing a downturn today following the release of its first-quarter financial results, which failed to meet analysts’ expectations. Although the company reported a remarkable 73% year-over-year increase in revenue, reaching $229 million, it fell short of projections by $2.1 million. Additionally, the net income for the quarter plummeted to $1.5 million compared to $5.2 million in the same period last year.

Mixed Performance:

Neogen’s legacy Food Safety division continues to perform strongly. However, the company faced challenges in its Animal Safety business due to destocking caused by multi-year low channel inventory levels. Furthermore, a slowdown in China contributed to lower growth in the company’s 3M Food Safety division.

Optimism for the Second Half:

Despite the headwinds in the first quarter, Neogen remains optimistic about the second half of the year. The company anticipates an improved end-market environment, which should support its recovery efforts. For the full fiscal year 2024, Neogen expects revenue to fall within the range of $955 million to $985 million, with adjusted EBITDA ranging from $235 million to $255 million.

Neogen Stock Forecast:

Based on Neogen stock forecast from two analysts, the average target price is USD 23.25 over the next 12 months. These analysts maintain a “Strong Buy” rating for the company.

However, Stock Target Advisor’s analysts are”Neutral.” This classification is based on six positive signals and seven negative signals.

NEOG Current performance:

At the last closing, Neogen Corporation’s stock price was USD 16.96, reflecting a decrease of -3.96% over the past week, a decline of -13.07% over the past month, but a notable increase of +33.75% over the past year.

Conclusion:

Neogen’s Q1 results show revenue growth but disappoint on net income, impacting its stock. The company is optimistic about the second half despite segment challenges. Analysts offer varying views on Neogen’s future. Its ability to address challenges and leverage market improvements will be key. Investors closely monitor its resurgence in food and animal safety.

Maryam Nasir