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Motley Fool Staff
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December 20, 2011
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Neogen (Nasdaq: NEOG ) came in under analyst's estimates last quarter, but now have a chance to fix things this quarter. The company will unveil its latest earnings on Thursday. Neogen and its subsidiaries develop, manufacture, and market a diverse line of products dedicated to food and animal safety.
What analysts say:
- Buy, sell, or hold?: Analysts strongly back Neogen, with four of six rating it a buy and the remainder rating it a hold. Analysts like Neogen better than competitor Meridian Bioscience overall. Wall Street has warmed to the stock over the past three months, with analysts increasing their endorsement from hold to moderate buy.
- Revenue forecasts: On average, analysts predict $47.4 million in revenue this quarter. That would represent a rise of 7.9% from the year-ago quarter.
- Wall Street earnings expectations: The average analyst estimate is earnings of $0.27 per share. Estimates range from $0.25 to $0.28.
What our community says:
CAPS All-Stars are solidly backing the stock with 100% granting it an outperform rating. The community at large backs the All-Stars with 97% assigning it a rating of outperform. Fools are bullish on Neogen, though the message boards have been quiet lately with only 85 posts in the past 30 days. Even with a robust four out of five stars, Neogen's CAPS rating falls a little short of the community's upbeat outlook.
Management:
Neogen's profit has risen year over year by an average of 22.9% over the past five quarters. Revenue has now gone up for three straight quarters. The company's gross margin shrank by 2.8 percentage points in the last quarter. Revenue rose 6.5% while cost of sales rose 12.7% to $22.7 million from a year earlier.
Now let's look at how efficient management is at running the business. Traditionally, margins represent the efficiency with which companies capture portions of sales dollars. The following table shows gross, operating, and net margins over the past four quarters.
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Quarter
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Q1
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Q4
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Q3
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Q2
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Gross Margin
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50.3%
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50.3%
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48.7%
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51.2%
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Operating Margin
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20.5%
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19.6%
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19.1%
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21.9%
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Net Margin
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13.1%
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13.7%
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11.7%
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13.9%
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For all our Neogen-specific analysis, including earnings and beyond, add Neogen to My Watchlist.
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