Neogen Shifts Focus to Scale Profitable Growth

Neogen Corp. (NASDAQ:NEOG) stock fell on Wednesday even after the company reported better-than-expected first-quarter financial results. First-Quarter Financial Performance Overview First-quarter 2027 adjusted earnings came in at 8 cents per share, beating the consensus loss of 7 cents. Sales were $222.80 million, up 6.5% year over year, and exceeded the consensus of $208.175 million. Core revenue increased by 8.1%. Management guided Q1 sales of $207 million-$209 million. Adjusted EBITDA was $41.6 million, with a margin of 18.7% compared to the management guidance of approximately $37 million. "As we entered fiscal year 2027, our focus shifted from strengthening fundamentals to scaling them to drive more consistent execution, improved customer outcomes and profitable growth," said Mike Nassif, Neogen’s president and CEO. CFO Bryan Riggsbee, in an earnings call, said that during the first quarter, the company saw a positive impact from the timing of certain orders that were expected in the second quarter. Read Also: Zoetis' Acquisition of Neogen Genomics Business Faces Regulatory Scrutiny in Australia Food Safety Business and Market Trends The Food Safety business delivered $163.2 million in revenue for the quarter, representing 8.1% core growth, led by the continued strength in indicator testing and culture media products, including Petrifilm, which were up 11%, and solid growth in bacterial and general sanitation products, which grew 7%, including double-digit growth in pathogen detection. Riggsbee further commented that recent earnings calls for food producers seem to suggest a slight improvement in general volume trends, but the commentary is mixed with consumers remaining under pressure from inflation. Although higher food production volumes can positively influence demand, evolving regulatory requirements have the potential to increase food safety testing independently of production growth. Animal Safety Segment and Macro Outlook The Animal Safety segment delivered $59.6 million in revenue with core growth of 8%, led by the veterinary instruments product category with strong growth in needles and syringes from improved supply and our biosecurity product category, which had strong growth in insect control products. From a macro perspective, signs in the animal safety end market continue to be encouraging, although farmers are facing some elevated input costs, namely fuel and fertilizer. Raised Fiscal 2027 Guidance Neogen on Tuesday raised fiscal 2027 sales guidance from $880 million-$885 million to $885 million-$890 million compared to the consensus of $883.175 million, indicating confidence in continued growth and operational improvements. The company now forecasts adjusted EBITDA of $181 million– $183 million compared to prior guidance of $180 million – $182 million. NEOG Stock Price Activity: Neogen shares are trading lower by 2.93% at $11.61 at the time of publication on Wednesday, according to Benzinga Pro data. Image by MacroEcon via Shutterstock Read Also: Economist Steve Hanke Backs Thomas Massie’s Criticism of Trump’s ‘One Big Beautiful Bill,’ Calls It ‘Smoke & Mirrors’ — ‘Setting a Course for the Iceberg’