Neogen's Upgraded Forecast Sparks Optimism for Recovery, Shares Surge

Neogen Corp. Surges Following Strong Q2 Results

Shares of Neogen Corp. (NASDAQ: NEOG) climbed after the company posted quarterly earnings that surpassed analyst expectations.

For the second quarter of fiscal 2026, Neogen reported adjusted earnings of $0.10 per share, outperforming the consensus estimate of $0.06 per share.

Revenue for the quarter reached $224.69 million, representing a 2.8% decrease from the previous year, but still exceeding the projected $207.85 million. The company’s core revenue saw a 2.9% uptick.

“As we enter the latter half of the fiscal year, our priorities remain on integrating Petrifilm, streamlining sample collection manufacturing, advancing our solutions-driven sales strategy, and continuously evaluating how we allocate resources across the business,” stated Mike Nassif, CEO and President of Neogen.

Gross margin for the quarter stood at 47.5%, down from 49.0% a year earlier. The decline was mainly attributed to increased tariff expenses, inventory write-downs, and unfavorable shifts in product mix.

Adjusted EBITDA came in at $48.7 million, with a margin of 21.7%. This compares to $51.4 million and a 22.2% margin in the same period last year.

Analysts at William Blair commented, “With the stock trading at 15 times our 2026 EBITDA forecast, we are maintaining our Market Perform rating as the turnaround is still in its early stages. Nonetheless, we recognize the positive momentum under the new leadership.”

Performance by Segment

• Food Safety: This division generated $165.6 million in revenue, a 0.8% increase year-over-year. Growth was driven by higher demand for sample collection products, robust Petrifilm sales, and gains in Indicator Testing and Culture Media.
• Animal Safety: Revenue for this segment was $59.1 million, reflecting an 11.8% decline. The decrease was primarily due to reduced sales of needles and syringes in the Veterinary Instruments & Disposables category, while the Life Sciences segment was impacted by the timing of substrate order fulfillment.

Future Outlook

Neogen has raised its fiscal 2026 sales forecast, now expecting revenue between $845 million and $855 million, up from the previous range of $820 million to $840 million. This new guidance is above the consensus estimate of $823.30 million.

The company, which provides diagnostic tests for diseases in cattle, swine, sheep, and goats, anticipates adjusted EBITDA to be around $175 million, compared to its earlier guidance of $165 million to $175 million. Capital expenditures are projected to remain at approximately $50 million.

Stock Performance

NEOG Price Action: At the time of reporting on Thursday, Neogen shares had surged 29.34% to $9.54.

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