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Neogen Corp NEOG

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Morningstar’s Analysis

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1-Star Price

PREMIUM

5-Star Price

PREMIUM

Economic Moat

PREMIUM

Capital Allocation

PREMIUM

Though Animal Care Generates Strong Growth in Fiscal Q3, Narrow-Moat Neogen Not Quite Back to Normal

Aaron Degagne Equity Analyst

Analyst Note

| Aaron Degagne |

Narrow-moat Neogen had a very good quarter and reported headline year-over-year revenue growth of 17%, exceeding our expectations and consensus (aggregated by Visible Alpha). Despite this outperformance on the top line, there were offsetting valuation factors related to elevated general and administrative expenses and an increasing share count. We are maintaining our $47 fair value estimate, and we continue to view shares as overvalued.

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Company Profile

Business Description

Neogen Corporation, headquartered in Lansing, Michigan, develops, manufactures, and markets various products for food and animal safety. In food safety (57% of sales), Neogen performs diagnostics to detect unintended substances in food and animal feed, such as pathogens, allergens, and drug residues, for global food and feed processing companies. In animal safety (43% of sales), Neogen sells veterinary instruments, pharmaceuticals, disinfectants, and genomics tests for animals, including cattle, horses, and canines. Neogen is also a market leader in testing for therapeutic drugs for farm and racing animals. Sales in the United States account for 60% of total revenue, while international markets, including Canada, Europe, Asia, and Latin America, account for the other 40% of sales.

Contact
620 Lesher Place
Lansing, MI, 48912
T +1 517 372-9200
Sector Healthcare
Industry Diagnostics & Research
Most Recent Earnings Feb 28, 2021
Fiscal Year End May 31, 2021
Stock Type Classic Growth
Employees 1,764

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