Neogen Corporation Just Reported A Surprise Loss: Here's What Analysts Think Will Happen Next

Shareholders might have noticed that Neogen Corporation (NASDAQ:NEOG) filed its quarterly result this time last week. The early response was not positive, with shares down 7.7% to US$13.00 in the past week. Things were not great overall, with a surprise (statutory) loss of US$0.01 per share on revenues of US$229m, even though the analysts had been expecting a profit. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. 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

Taking into account the latest results, the most recent consensus for Neogen from two analysts is for revenues of US$962.9m in 2025. If met, it would imply a credible 3.6% increase on its revenue over the past 12 months. Per-share earnings are expected to bounce 937% to US$0.075. Before this earnings report, the analysts had been forecasting revenues of US$985.5m and earnings per share (EPS) of US$0.15 in 2025. From this we can that sentiment has definitely become more bearish after the latest results, leading to lower revenue forecasts and a large cut to earnings per share estimates.

What's most unexpected is that the consensus price target rose 8.6% to US$19.00, strongly implying the downgrade to forecasts is not expected to be more than a temporary blip.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. We would highlight that Neogen's revenue growth is expected to slow, with the forecast 2.9% annualised growth rate until the end of 2025 being well below the historical 19% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 8.0% per year. 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 biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Neogen. Unfortunately, they also downgraded their revenue estimates, and our data indicates underperformance compared to the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At least one analyst has provided forecasts out to 2026, which can be seen for free on our platform here.

It is also worth noting that we have found 1 warning sign for Neogen that you need to take into consideration.

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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.