NeoGenomics, Inc. (NEO, Financial) has been assigned a Neutral rating by Guggenheim's analyst, Subbu Nambi. This initial rating reflects a balanced outlook for the company, suggesting that the stock's current market price accurately represents its inherent value based on existing fundamentals. Investors are advised to consider this analysis in light of broader market conditions and strategic advancements within the company.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 12 analysts, the average target price for NeoGenomics Inc (NEO, Financial) is $10.88 with a high estimate of $15.00 and a low estimate of $8.00. The average target implies an upside of 36.62% from the current price of $7.96. More detailed estimate data can be found on the NeoGenomics Inc (NEO) Forecast page.
Based on the consensus recommendation from 15 brokerage firms, NeoGenomics Inc's (NEO, Financial) average brokerage recommendation is currently 2.1, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for NeoGenomics Inc (NEO, Financial) in one year is $18.65, suggesting a upside of 134.3% from the current price of $7.96. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the NeoGenomics Inc (NEO) Summary page.
NEO Key Business Developments
Release Date: April 29, 2025
- Revenue: $168 million for Q1 2025, an 8% increase over the prior year.
- Adjusted EBITDA: $7.1 million, marking the seventh consecutive quarter of positive adjusted EBITDA.
- Clinical Testing Volumes: Increased by 8% compared to the prior year.
- Revenue per Test: Increased by 3%.
- NGS Revenue Growth: 18% growth in Q1 2025.
- Adjusted Gross Margin: Improved by 146 basis points to 47%.
- Adjusted Gross Profit: $79 million, up 11% from the prior year.
- Sales and Marketing Expense: $23 million, a 12% increase.
- R&D Expense: Increased by 34% to $10 million.
- G&A Expense: $68 million, driven by higher technology and compensation costs.
- Cash and Marketable Securities: $358 million, a 7% decrease from the prior year.
- Cash Flow from Operations: Negative $25 million, a 2% improvement over Q1 2024.
- Full Year 2025 Revenue Guidance: Revised to $747 million to $759 million, representing 13% to 15% growth.
- Pathline Acquisition Contribution: Expected to contribute $12 million to $14 million in revenue for 2025.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- NeoGenomics Inc (NEO, Financial) reported a solid start to the year with revenues of $168 million and adjusted EBITDA of $7.1 million, marking the seventh consecutive quarter of positive adjusted EBITDA.
- Clinical testing volumes increased by 8% compared to the previous year, with a 3% increase in revenue per test.
- The acquisition of Pathline is expected to expand capabilities and accelerate growth, contributing to incremental top-line revenue this year.
- NeoGenomics Inc (NEO) launched five new NGS products, which now account for 22% of total clinical revenue, demonstrating strong market penetration.
- The company is expanding its commercial resources, with approximately 140 salespeople, to drive market penetration into community oncology and support new product launches.
Negative Points
- The non-clinical business, which accounts for around 10% of total revenue, is facing macroeconomic challenges, including reduced pharma and biotech spending.
- Recent tariffs and potential cuts in NIH funding are anticipated to result in reduced R&D spending across the non-clinical customer base.
- The Pathline acquisition is expected to lower average unit price (AUP), adjusted gross margins, and adjusted EBITDA for the remainder of 2025.
- There is heightened uncertainty around pharma and biotech spending, which is expected to lead to a decline in pharma revenue this year.
- The integration of Pathline and the validation of NeoGenomics Inc (NEO)'s existing tests in the Pathline lab will take time, with minimal benefit expected this year.
