Neogen Corporation (NEOG): A Bull Case Theory

We came crossed a bullish thesis connected Neogen Corporation connected Valueinvestorsclub.com by Dr. Ridgewell. In this article, we volition summarize the bulls’ thesis connected NEOG. Neogen Corporation's stock was trading astatine $5.92 arsenic of December 1st. NEOG’s trailing and guardant P/E were 822.50 and 16.00 respectively according to Yahoo Finance.

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Neogen presents a compelling accidental to put successful a high-quality nutrient and carnal information level that has undergone important operational strain but is present approaching an inflection point. Following its 2022 merger with 3M’s Food Safety division—a woody that doubled the stock count, added $1 cardinal of debt, and required dense superior investments—the institution struggled with duplicative manufacturing costs, delays successful transitioning 3M’s high-margin Petrifilm production, and a sprawling portfolio lacking strategical focus.

These issues drove the banal down much than 80% from pre-deal levels, pushing valuation to ~10x FY27 EBITDA—near financial-crisis lows contempt Neogen owning immoderate of the industry’s astir invaluable testing, sanitation, and sampling assets. With the integration present successful its last stages and Petrifilm SKU certifications progressing implicit the adjacent 4 to 5 quarters, the institution is adjacent to unlocking the borderline benefits embedded successful its caller $208 cardinal Lansing facility, portion capex is acceptable to autumn sharply successful FY26.

A large turning constituent arrived with the August 2025 hiring of Mike Nassif—an relation known for portfolio rationalization and analyzable diagnostics turnarounds. Under his leadership, Neogen has begun divesting lower-quality businesses, starting with the $130 cardinal merchantability of its cleaners and disinfectants unit, utilizing proceeds to accelerate deleveraging. A merchantability oregon restructuring of the genomics concern is apt adjacent and could trim leverage by different 0.5x–1.0x portion sharpening Neogen’s absorption connected its higher-growth bovine segment.

With improved concern quality, enhanced plus backing, clearer integration visibility, and a enactment squad incentivized done refreshed LTIP structures, Neogen is positioned for meaningful rerating. If execution continues and Petrifilm ramps arsenic expected, the banal could perchance triple implicit the adjacent 2 years, supported by stronger escaped currency flow, little leverage, and renewed capitalist confidence.

Previously we covered a bullish thesis connected IDEXX Laboratories, Inc. (IDXX) by Hidden Market Gems successful March 2025, highlighting its enactment successful veterinary diagnostics and high-margin recurring revenue. The banal has appreciated by 70.84% since then, arsenic beardown diagnostic request validated the thesis. It inactive stands, supported by durable animal-health tailwinds. Dr. Ridgewell echoes this presumption portion contrasting Neogen’s restructuring-led inflection.