Neogen Corporation Just Missed Earnings With A Surprise Loss - Here Are Analysts Latest Forecasts

Neogen Corporation (NASDAQ:NEOG) shareholders are probably feeling a little disappointed, since its shares fell 7.1% to US$18.16 in the week after its latest second-quarter results. Things were not great overall, with a surprise (statutory) loss of US$0.02 per share on revenues of US$230m, even though the analysts had been expecting a profit. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

View our latest analysis for Neogen

After the latest results, the twin analysts covering Neogen are now predicting revenues of US$938.5m in 2024. If met, this would reflect a satisfactory 2.2% improvement in revenue compared to the last 12 months. Per-share earnings are expected to swell 10% to US$0.06. In the lead-up to this report, the analysts had been modelling revenues of US$960.6m and earnings per share (EPS) of US$0.11 in 2024. From this we can that sentiment has definitely become more bearish after the latest results, leading to lower revenue forecasts and a pretty serious reduction to earnings per share estimates.

The consensus price target fell 33% to US$17.50, with the weaker earnings outlook clearly leading valuation estimates.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Neogen's past performance and to peers in the same industry. We would highlight that Neogen's revenue growth is expected to slow, with the forecast 4.4% annualised growth rate until the end of 2024 being well below the historical 17% p.a. growth over the last five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 7.8% annually. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Neogen.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse than the wider industry. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Neogen's future valuation.

With that in mind, we wouldn't be too quick to come to a conclusion on Neogen. Long-term earnings power is much more important than next year's profits. At least one analyst has provided forecasts out to 2026, which can be seen for free on our platform here.

Plus, you should also learn about the 1 warning sign we've spotted with Neogen .

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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.