Investors one-year losses continue as Neogen (NASDAQ:NEOG) dips a further 4.1% this week, earnings continue to decline

Investors can approximate the average market return by buying an index fund. But if you buy individual stocks, you can do both better or worse than that. That downside risk was realized by Neogen Corporation (NASDAQ:NEOG) shareholders over the last year, as the share price declined 37%. That falls noticeably short of the market decline of around 1.1%. Longer term investors have fared much better, since the share price is up 5.9% in three years. Shareholders have had an even rougher run lately, with the share price down 23% in the last 90 days. This could be related to the recent financial results - you can catch up on the most recent data by reading our company report.

If the past week is anything to go by, investor sentiment for Neogen isn't positive, so let's see if there's a mismatch between fundamentals and the share price.

Check out our latest analysis for Neogen

To paraphrase Benjamin Graham: Over the short term the market is a voting machine, but over the long term it's a weighing machine. By comparing earnings per share (EPS) and share price changes over time, we can get a feel for how investor attitudes to a company have morphed over time.

Unhappily, Neogen had to report a 21% decline in EPS over the last year. This reduction in EPS is not as bad as the 37% share price fall. So it seems the market was too confident about the business, a year ago. Having said that, the market is still optimistic, given the P/E ratio of 65.98.

You can see below how EPS has changed over time (discover the exact values by clicking on the image).

It's probably worth noting that the CEO is paid less than the median at similar sized companies. It's always worth keeping an eye on CEO pay, but a more important question is whether the company will grow earnings throughout the years. It might be well worthwhile taking a look at our free report on Neogen's earnings, revenue and cash flow.

A Different Perspective

We regret to report that Neogen shareholders are down 37% for the year. Unfortunately, that's worse than the broader market decline of 1.1%. However, it could simply be that the share price has been impacted by broader market jitters. It might be worth keeping an eye on the fundamentals, in case there's a good opportunity. Longer term investors wouldn't be so upset, since they would have made 5%, each year, over five years. If the fundamental data continues to indicate long term sustainable growth, the current sell-off could be an opportunity worth considering. It's always interesting to track share price performance over the longer term. But to understand Neogen better, we need to consider many other factors. Case in point: We've spotted 2 warning signs for Neogen you should be aware of.

We will like Neogen better if we see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on US exchanges.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.