Neogen Corp (NEOG - Snapshot Report) continues to set new company records for revenue, net income and, most importantly, share price.
Neogen Corp makes food and animal safety products. The company offers testing kits for food-borne bacteria, allergens, sanitation issues and other safety concerns. Neogen's animal safety offerings include diagnostics, veterinary instruments, pharmaceuticals, supplements, disinfectants and rodenticides.
Net Income Jumps 33%
Neogen reported first-quarter results for fiscal 2011 that showed a 33% increase in net income, to $5.8 million. Earnings broke down to 25 cents per share, which is 2 cents better than analysts expected.
Revenues were also up 33%, rising about $10.6 million, to $42.9 million. The gains game from a solid 14% organic growth across a variety of product lines. The remainder came from the newly added BioKits and GeneSeek lines. Neogen has never seen revenues or net income this high in the company's history.
Excellent Earnings History
While the earnings surprise was by a narrow margin, it extended Neogen's streak to 6 quarters. The company has missed earnings expectations just twice in the past 5 years.
Analysts are unanimously raising their full-year outlooks for Neogen, thanks to the most recent surprise. The full-year Zacks Consensus Estimates is up 4 cents to 96 cents. Next year's projections are up 9 cents on average, to $1.14.
If the company meets these expectations, the annual growth rates will be 28% and 19% respectively. However, looking at the historical estimate trends and surprise history Neogen should exceed that rate.
Top Rated Company
Not only is Neogen a Zacks #1 Rank (Strong Buy), but it is also the top rated stock in its 74-company industry. When you look at some of the fundamentals it is easy to see why. The Net profit margin of 12.5% is exponentially ahead of the 1.4% its peers are averaging. Neogen's return on equity of 12.6% is just over double the industry average.
After another record-setting quarter it is no surprise that shares continue to set new all-time highs. Driven by strong and steady earnings growth, investors continue to buy up shares of NEOG. And so far, Neogen has not disappointed.
Bill Wilton is the Growth Stock Strategist for Zacks.com. He is also the Editor in charge of the market-beating Zacks Growth Trader service