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Neogen (NEOG) Up 6.7% Since Last Earnings Report: Can It Continue?
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A month has gone by since the last earnings report for Neogen (NEOG - Free Report) . Shares have added about 6.7% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Neogen due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Neogen Corporation reported first-quarter fiscal 2027 adjusted earnings of 8 cents per share, up 100% year over year and above the Zacks Consensus Estimate by 60%.
Revenues of $222.8 million increased 6.5% year over year and topped the consensus mark by 7.1%.
NEOG Posts Higher Margins and Profitability
Gross profit increased to $105.5 million from $95 million in the prior-year quarter. Gross margin expanded to 47.4% from 45.4%, primarily reflecting volume increases, price increases and favorable foreign-currency effects, partially offset by higher duplicative Petrifilm costs. Adjusted gross margin improved 30 basis points to 49.8%.
Adjusted operating income increased to $36.5 million from $29.6 million, with adjusted operating margin expanding to 16.4% from 14.1%. Adjusted EBITDA rose to $41.6 million from $35.5 million, while adjusted EBITDA margin improved 170 basis points to 18.7%.
Operating expenses declined to $107.3 million from $111.1 million. Lower sales and marketing expenses helped offset increased research and development investments. On a GAAP basis, Neogen recorded a net loss of $11.9 million, compared with net income of $36.3 million a year earlier, when results benefited from a divestiture gain.
Neogen Strengthens Cash Flow and Reduces Debt
First-quarter cash flow from operations totaled $12.9 million, compared with $10.8 million a year earlier. Free cash flow improved to $4.7 million from negative $13.2 million, aided by higher operating cash flow and reduced capital expenditures.
Cash and cash equivalents stood at $172 million at quarter-end, compared with $185.5 million at fiscal 2026-end. Management also highlighted ongoing efforts to improve inventory management and strengthen the balance sheet through additional debt repayments.
Neogen Raises Fiscal 2027 Financial Outlook
For fiscal 2027, Neogen now expects revenues of $885-$890 million, up from its previous projection of $880-$885 million. Adjusted EBITDA guidance was raised to $181-$183 million from $180-$182 million.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates review.
The consensus estimate has shifted -33.33% due to these changes.
VGM Scores
At this time, Neogen has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with a D. Following the exact same course, the stock was allocated a score of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Interestingly, Neogen has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Neogen (NEOG) Up 6.7% Since Last Earnings Report: Can It Continue?
A month has gone by since the last earnings report for Neogen (NEOG - Free Report) . Shares have added about 6.7% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Neogen due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
NEOG Q1 Earnings & Revenues Beat Estimates, Fiscal 2027 Guidance Raised
Neogen Corporation reported first-quarter fiscal 2027 adjusted earnings of 8 cents per share, up 100% year over year and above the Zacks Consensus Estimate by 60%.
Revenues of $222.8 million increased 6.5% year over year and topped the consensus mark by 7.1%.
NEOG Posts Higher Margins and Profitability
Gross profit increased to $105.5 million from $95 million in the prior-year quarter. Gross margin expanded to 47.4% from 45.4%, primarily reflecting volume increases, price increases and favorable foreign-currency effects, partially offset by higher duplicative Petrifilm costs. Adjusted gross margin improved 30 basis points to 49.8%.
Adjusted operating income increased to $36.5 million from $29.6 million, with adjusted operating margin expanding to 16.4% from 14.1%. Adjusted EBITDA rose to $41.6 million from $35.5 million, while adjusted EBITDA margin improved 170 basis points to 18.7%.
Operating expenses declined to $107.3 million from $111.1 million. Lower sales and marketing expenses helped offset increased research and development investments. On a GAAP basis, Neogen recorded a net loss of $11.9 million, compared with net income of $36.3 million a year earlier, when results benefited from a divestiture gain.
Neogen Strengthens Cash Flow and Reduces Debt
First-quarter cash flow from operations totaled $12.9 million, compared with $10.8 million a year earlier. Free cash flow improved to $4.7 million from negative $13.2 million, aided by higher operating cash flow and reduced capital expenditures.
Cash and cash equivalents stood at $172 million at quarter-end, compared with $185.5 million at fiscal 2026-end. Management also highlighted ongoing efforts to improve inventory management and strengthen the balance sheet through additional debt repayments.
Neogen Raises Fiscal 2027 Financial Outlook
For fiscal 2027, Neogen now expects revenues of $885-$890 million, up from its previous projection of $880-$885 million. Adjusted EBITDA guidance was raised to $181-$183 million from $180-$182 million.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates review.
The consensus estimate has shifted -33.33% due to these changes.
VGM Scores
At this time, Neogen has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with a D. Following the exact same course, the stock was allocated a score of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Interestingly, Neogen has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.