Neogen Corp. (NASDAQ:NEOG) stock rose after the company reported better-than-expected second-quarter financial results.
Second-quarter 2026 adjusted earnings came in at 10 cents per share, beating the consensus of 6 cents.
Sales were $224.69 million, down 2.8% year over year, and exceeded the consensus of $207.85 million. Core revenue increased by 2.9%.
“As we look to the second half of the fiscal year, we remain highly focused on the integration of Petrifilm and optimization of sample collection manufacturing, as well as enhancing our solutions-based selling approach and implementing a continuous review of resource allocation across the enterprise,” said Mike Nassif, Neogen’s CEO and President.
Gross margin was 47.5% in the second quarter of fiscal 2026 compared to 49.0% a year ago, with the decrease primarily due to tariff costs, inventory write-offs, and a negative impact from product mix.
Adjusted EBITDA was $48.7 million, with a margin of 21.7%, compared to $51.4 million and a margin of 22.2% in the prior-year period.
In a research note, the William Blair analyst said, “With shares at 15 times our 2026 EBITDA estimate, we maintain our Market Perform rating given the early nature of the turnaround effort. That said, we acknowledge what is already an improving story under new leadership.”
Segment Highlights
The Food Safety segment generated revenue of $165.6 million, reflecting a 0.8% year-over-year increase, driven by growth in Indicator Testing and Culture Media on higher demand for sample collection products and continued strength in Petrifilm sales.
The Animal Safety segment reported revenue of $59.1 million, a decline of 11.8%. Results were pressured by lower sales of needles and syringes in the Veterinary Instruments & Disposables category, while the Life Sciences category was impacted primarily by the timing of substrate purchase fulfillment.
Outlook
Neogen raised its fiscal 2026 sales guidance from $820 million-$840 million to $845 million-$855 million versus the consensus of $823.30 million.
The company, which offers tests for a wide range of cattle, swine, sheep, and goat diseases, expects adjusted EBITDA to be approximately $175 million compared to the prior range of $165 million and $175 million. Capital expenditures continue to be expected to total approximately $50 million.
NEOG Price Action: Neogen shares were up 29.34% at $9.54 at the time of publication on Thursday, according to Benzinga Pro data.
Image by MacroEcon via Shutterstock
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