NEOG

Neogen ($NEOG) CAO Buys 10,000 Shares at Historic Low After 70% Plunge; Fifth Executive Insider Purchase in Nine Months

04/10/2025 14:16

Neogen Corporation's ($NEOG) Chief Accounting Officer John Patrick Moylan has made a significant insider purchase as the company's stock hit historic lows. According to a Form 4 filing with the Securities and Exchange Commission, Moylan purchased 10,000 shares at $5.07 per share on April 10, 2025. This investment of approximately $50,700 comes immediately after Neogen's stock plummeted the previous day, making this purchase particularly noteworthy. Neogen's stock has been on a consistent downward trajectory over the past six months. From trading above $17 in mid-September 2024, the shares have fallen to as low as $5.02 on April 9, 2025, representing a decline of over 70%. This steep drop reflects a combination of the company's consecutive disappointing quarterly results and broader market instability. What stands out is the pattern of consistent insider buying by Neogen's executives as the stock has declined. There have been five insider purchases over the past nine months, all by senior management. CEO John Edward Adent purchased 14,500 shares at $13.80 per share (approximately $200,100) on October 11, 2024, and added another 23,035 shares at $11.03 per share (around $254,076) on January 16, 2025. On the same day, CFO David Naemura acquired 14,800 shares at $11.11 per share (approximately $164,428). This cluster buying pattern suggests that management believes the current stock price is below the company's intrinsic value. Particularly telling is how executives have purchased increasingly larger positions as the stock has fallen, which can be interpreted as a vote of confidence in the absence of a formal share repurchase program. While insider buying continues, Neogen's performance remains challenged. The company reported Q3 fiscal 2025 results (ended February 28) on April 9, 2025, with revenue of $221 million (down 3.4% year-over-year) and a quarterly loss of $11 million. Adjusted earnings per share came in at $0.10, missing both the prior year's $0.12 and analysts' expectations of $0.11. Neogen provides products in two segments: Food Safety and Animal Safety. Food Safety revenue decreased by 3.2% to $152.7 million, while Animal Safety revenue fell by 4% to $68.2 million. Despite these performance challenges, the company is working on improving its financial structure. On April 7, 2025, Neogen announced the refinancing of $550 million principal of its original $650 million term loan and its revolving credit facility that was due in August 2027. The new financing consists of a $450 million term loan and a $250 million revolving credit facility, both maturing in 2030. This move appears to be a strategic effort to restructure the company's debt and enhance financial flexibility. According to financial data, Neogen has trailing twelve months (TTM) revenue of $913.83 million but a TTM net loss of $476.33 million. The profit margin stands at -52.12%, indicating significant challenges. Nevertheless, the company maintains approximately $127.7 million in cash and a healthy current ratio of 3.77, suggesting relatively solid short-term financial health. Neogen's stock plunge is also tied to broader market instability. In early April 2025, U.S. markets experienced significant volatility due to trade tensions and President Trump's tariff announcements. On April 4, the U.S. dollar recorded its largest decline since November 2022, falling approximately 1.7%, and stock market declines continued on April 7. While markets rebounded significantly on April 9 following President Trump's announcement of a 90-day pause on tariffs, with the S&P 500 surging 9.5%, Neogen failed to fully benefit from this market recovery due to its disappointing earnings release. Analysts maintain an average "buy" rating on Neogen, with a median 12-month price target of $15.00, suggesting significant upside potential from current levels. However, this represents a downward revision from the $20.00 target in July 2024. The recent insider purchase, particularly Moylan's buying immediately after the steep decline, demonstrates management's continued confidence in the company's long-term prospects. The food and animal safety market presents long-term growth potential, and Neogen maintains a strong market position in this sector. However, improving performance and restoring profitability remain critical short-term challenges. Investors should weigh these strong insider buying signals against the fundamental challenges facing the company, including performance struggles and substantial losses. While consistent insider buying doesn't always lead to immediate stock recoveries, it can be interpreted as a positive signal from a long-term perspective.

You can receive notifications when news is published.