Neogen Corporation (NASDAQ:NEOG) Just Released Its Second-Quarter Earnings: Here's What Analysts Think

The quarterly results for Neogen Corporation (NASDAQ:NEOG) were released last week, making it a good time to revisit its performance. It looks like the results were a bit of a negative overall. While revenues of US$115m were in line with analyst predictions, statutory earnings were less than expected, missing estimates by 3.2% to hit US$0.30 per share. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Neogen after the latest results.

See our latest analysis for Neogen

Taking into account the latest results, the consensus forecast from Neogen's four analysts is for revenues of US$448.4m in 2021, which would reflect a credible 3.5% improvement in sales compared to the last 12 months. Statutory earnings per share are predicted to rise 4.9% to US$1.20. Before this earnings report, the analysts had been forecasting revenues of US$450.8m and earnings per share (EPS) of US$1.22 in 2021. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.

The analysts reconfirmed their price target of US$81.50, showing that the business is executing well and in line with expectations. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on Neogen, with the most bullish analyst valuing it at US$88.00 and the most bearish at US$75.00 per share. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or thatthe analysts have a strong view on its prospects.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. We would highlight that Neogen's revenue growth is expected to slow, with forecast 3.5% increase next year well below the historical 6.7%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 10.0% per year. Factoring in the forecast slowdown in growth, it seems obvious that Neogen is also expected to grow slower than other industry participants.

The Bottom Line

The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. On the plus side, there were no major changes to revenue estimates; although forecasts imply revenues will perform worse than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Neogen analysts - going out to 2024, and you can see them free on our platform here.

We don't want to rain on the parade too much, but we did also find 1 warning sign for Neogen that you need to be mindful of.

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This article by Simply Wall St is general in nature. 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.
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