Neogen Corp. (NASDAQ:NEOG) stock rallied after the company reported better-than-expected first-quarter sales results.
- First-quarter 2026 adjusted earnings came in at 4 cents per share, in line with the estimates.
- Sales hovered $209.19 million; that’s down 3.6% year over year, exceeded the consensus of $204.16 million.
- Gross margin: 45.4% in Q1 of fiscal 2026 compared to 48.4% a year ago, due to relocated production of sample collection products, as well as lower revenue and tariffs.
- Excluding the integration costs, first-quarter gross margin was 49.5%.
- First-quarter Adjusted EBITDA was $35.5 million, representing an Adjusted EBITDA Margin of 17.0% (a year ago, it was $43.7 million and a margin of 20.1%).
In a research note, William Blair analysts blamed “transient/integration-related issues.”
In theory, they explained, “things should improve from here.”
The firm maintains its Market Perform rating and expects share appreciation to hinge on more durable improvements in the P&L over the coming quarters.
Also Read: Testing Firm Neogen Offloads Cleaners Division To Kersia In $130 Million Deal
A closer look at Neogen’s segments shows:
- Food Safety: Revenues were $152.1 million, a decrease of 4.6%. The segment’s strongest core revenue growth was in the Bacterial & General Sanitation product category, which benefited from higher sales in pathogen detection products.
- Animal Safety: Sales were $57.1 million, a marginal decrease of 0.8%. The segment’s core revenue growth was led by the Animal Care & Other product category, with higher biologics and wound care product sales.
- Genomics: The business returned to positive core revenue growth in the mid-single-digit range in the first quarter. A decline in the companion animal market partially offset solid growth in bovine and other markets.
Neogen affirmed its fiscal 2026 sales guidance of $820 million-$840 million versus the consensus of $819.10 million.
The company, which offers tests for a wide range of cattle, swine, sheep, and goat diseases, expects adjusted EBITDA to be between $165 million and $175 million. Capital expenditures will likely total $50 million.
Price Action: NEOG stock is up 18.3% at $6.89 at the last check on Thursday.
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