Neogen Q4 revenue beats on food safety segment growth

Overview

• U.S. food safety solutions firm's fiscal Q4 revenue flat yr/yr, beating analyst expectations

• Adjusted EPS and adjusted net income for Q4 beat analyst expectations

• Adjusted EBITDA margin rose to 20.2% from 18.0%, aided by cost initiatives and gross margin gains

Outlook

• Neogen sees FY27 revenue between $880 mln and $885 mln, including Genomics division contribution

• Company expects FY27 adjusted EBITDA of $180 mln to $182 mln, including Genomics division

• Neogen guides Q1 FY27 revenue to $207 mln-$209 mln and adjusted EBITDA to about $37 mln

Result Drivers

• FOOD SAFETY SEGMENT - Core Food Safety revenue grew 5.8% in Q4, the highest rate since FY23, driven by strong gains in Indicator Testing, Culture Media, and Bacterial and General Sanitation

• ANIMAL SAFETY SUPPLY CHAIN - Animal Safety revenue remained down year-over-year but rose 7% sequentially as supply-related challenges were largely resolved

• MARGIN IMPROVEMENT - Gross margin and adjusted gross margin rose, helped by favorable product mix and pricing changes

Company press release: ID:nBw5KtZKya

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 $11.50, about 22.3% above its July 29 closing price of $9.40

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(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)