Neogen Corporation NEOG reported third-quarter fiscal 2026 adjusted earnings per share (EPS) of 9 cents, down 10% year over year. However, the metric topped the Zacks Consensus Estimate by 125%.
Neogen’s Q3 Revenues
Revenues in the quarter decreased 4.4% on a year-over-year basis to $211.2 million. Meanwhile, core revenues increased 0.1%. Divestitures and discontinued product lines had a negative impact of 7.5%, while foreign currency had a positive impact of 3%. The metric topped the Zacks Consensus Estimate by 3.3%.
Following the announcement yesterday, NEOG stock fell 2.95% to close the session at $10.04.
Neogen’s Segments in Detail
The company's Food Safety segment registered revenues of $156.7 million in the fiscal third quarter, up 2.6% year over year. This consisted of 4% core revenue growth, a negative 5.4% impact of divestitures and discontinued product lines and a positive foreign currency impact of 4%. Our model projected Food Safety revenues to be $146.6 million for the fiscal third quarter.
Neogen Corporation Price, Consensus and EPS Surprise
Neogen Corporation price-consensus-eps-surprise-chart | Neogen Corporation Quote
Revenues from the Animal Safety segment totaled $54.5 million, down 20.1% year over year. This consisted of an 8.7% core revenue decrease, a favorable 0.5% foreign currency impact and a negative 11.9% impact of divestitures and discontinued product lines. Our model’s projection for the business was $57.1 million.
Neogen’s Margin Details
In the third quarter of fiscal 2026, gross profit declined 10.2% year over year to $99 million. The cost of revenues edged up 1.4% to $112.2 million. The gross margin contracted 303 basis points (bps) year over year to 46.9%.
Sales and marketing expenses amounted to $38.2 million, down 14.4% year over year, whereas administrative expenses increased 8.1% from the prior-year quarter’s level to $60 million. R&D expenses totaled $3.8 million, down 15.6% year over year. The quarter recorded an operating loss of $3.3 million compared to an operating profit of $5.4 million in the year-ago period.
Neogen’s Q3 Cash Position
Neogen’s cash and cash equivalents at the end of the fiscal third quarter totaled $137.1 million compared with $145.3 million at the end of the second quarter.
Cumulative net cash provided by operating activities came in at $53 million compared with $41.8 million a year ago.
Neogen’s Fiscal 2026 Outlook
The company raised its fiscal 2026 revenue projection, now expecting between $857 million and $860 million (previously $845 million-$855 million). The Zacks Consensus Estimate for the same currently stands at $850.1 million.
Adjusted EBITDA is expected to be roughly $175 million (same as earlier).
Our Take on NEOG
Neogen ended the fiscal third quarter with better-than-expected earnings and revenues. However, both metrics were down on a year-over-year basis. The Animal Safety business experienced several third-party, supply-based setbacks, resulting in lower-than-anticipated growth. The contraction of gross margin in the quarter is also discouraging.
On a promising note, the Food Safety segment delivered another quarter of core revenue growth and was consistent with current market dynamics. Neogen made significant progress on its strategic initiatives, such as commercial prowess, high-impact innovation and operational efficiency, to stabilize and strengthen its core business. The raised revenue guidance for the year appears promising.
The company recently announced that it has entered into a definitive agreement to sell its global Genomics business to Zoetis Inc. for a purchase price of $160.0 million, subject to customary closing adjustments. The deal is expected to close by the end of the second quarter of fiscal year 2027.
NEOG’s Zacks Rank and Key Picks
Neogen currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks from the broader medical space are Globus Medical GMED, Phibro Animal Health PAHC and IDEXX Laboratories IDXX.
Globus Medical, currently sporting a Zacks Rank #1 (Strong Buy), reported fourth-quarter 2025 adjusted EPS of $1.28, topping the Zacks Consensus Estimate by 20.76%. Revenues of $826.4 million beat the Zacks Consensus Estimate by 4.9%. You can see the complete list of today’s Zacks #1 Rank stocks here.
GMED’s earnings yield of 4.8% favorably compares with the industry’s negative 1.6% yield. The company surpassed earnings estimates in three of the trailing four quarters and missed on one occasion, the average surprise being 18.8%.
Phibro Animal Health, carrying a Zacks Rank #2 (Buy) at present, posted second-quarter fiscal 2026 adjusted EPS of 87 cents, exceeding the Zacks Consensus Estimate by 27.01%. Revenues of $373.9 million surpassed the Zacks Consensus Estimate by 4.72%.
PAHC has an estimated long-term earnings growth rate of 21.5% compared with the industry’s 12% growth. The company’s earnings outpaced estimates in each of the trailing four quarters, with the average surprise being 20.15%.
IDEXX Laboratories, carrying a Zacks Rank #2, reported a fourth-quarter 2025 EPS of $3.08, which surpassed the Zacks Consensus Estimate by 18%. Revenues of $1.09 billion topped the Zacks Consensus Estimate by 1.86%.
IDXX has an earnings yield of 2.5% compared with the industry’s negative 1.6% yield. The company’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 6.11%.
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