Neogen beats Q3 revenue estimates, raises outlook

Overview

• U.S. food safety solutions provider's Q3 revenue fell 4.4% but beat analyst expectations

• Adjusted net income and adjusted EBITDA for Q3 beat analyst expectations

• Company raised FY26 revenue outlook and will divest Genomics business unit

Outlook

• Neogen raises FY26 revenue outlook to $857 mln-$860 mln from $845 mln-$855 mln

• Company maintains FY26 adjusted EBITDA guidance at approximately $175 mln

• Neogen expects Petrifilm manufacturing transition to complete by November 2026

Result Drivers

• ANIMAL SAFETY SUPPLIER ISSUES - Co said Animal Safety revenue fell due to third-party supplier challenges in the quarter

• FOOD SAFETY SEGMENT GROWTH - Food Safety revenue rose, led by indicator testing and culture media products, and bacterial and general sanitation products

• PETRIFILM TRANSITION COSTS - Gross margin declined mainly due to duplicative costs related to the Petrifilm manufacturing transition, with some impact from tariff costs and inventory write-offs

Company press release: ID:nBw6kKDqra

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 2 "strong buy" or "buy", 3 "hold" and no "sell" or "strong sell"

• The average consensus recommendation for the medical equipment, supplies & distribution peer group is "buy"

• Wall Street's median 12-month price target for Neogen Corp is $11.00, about 6.4% above its April 8 closing price of $10.34

• The stock recently traded at 32 times the next 12-month earnings vs. a P/E of 23 three months ago

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