Why Is Neogen (NEOG) Up 4.4% Since Last Earnings Report?

It has been about a month since the last earnings report for Neogen (NEOG). Shares have added about 4.4% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Neogen due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.

Neogen Sees Q4 Revenue Growth on Strong Food Safety Business

Neogen Corporation reported fourth-quarter fiscal 2019 earnings per share (EPS) of 30 cents beat the Zacks Consensus Estimate of 28 cents by 7.1%. However, EPS declined 9.1% from the year-ago quarter.

For fiscal 2019, EPS was $1.15, down 4.9% from a year ago. The figure surpassed the Zacks Consensus Estimate of $1.12 by 2.7%.

Revenues in the quarter increased 1.6% on a year-over-year basis to $109.8 million, missing the Zacks Consensus Estimate of $111 million by 1.1%.

For fiscal 2019, revenues came in at $414.2 million, up 4.1% from the year-ago period. The figure missed the Zacks Consensus Estimate of $415.4 million by 0.3%.

Revenues in Detail

Food Safety Segment: For the quarter under review, revenues at the segment totaled $56.4 million, up 9.1% year over year.

Animal Safety Segment: During the fourth quarter, this segment recorded revenues of $53.3 million, reflecting a 5.7% decline from the year-ago quarter.

Margin Details

Gross margin expanded 110 basis points (bps) to 46% in the fiscal fourth quarter.During the reported quarter, operating income was $18.7 million, declining 6.4% from the year-ago figure of $19.9 million. Operating margin contracted 130 bps to 17.1% in the quarter under review.

How Have Estimates Been Moving Since Then?

Estimates revision followed an upward path over the past two months.

VGM Scores

At this time, Neogen has an average Growth Score of C, a grade with the same score on the momentum front. Charting a somewhat similar path, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.

Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Neogen has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

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