Neogen Surges 102.8% in a Year: What's Driving the Rally?

Neogen Corporation NEOG has witnessed strong momentum over the past year. Shares of the company have risen 102.8%, outperforming the industry’s 24.7% decline. The S&P 500 composite has increased 21.4% during the same time frame.

With healthy fundamentals and strong growth opportunities, this Zacks Rank #2 (Buy) company appears to be a solid wealth creator for its investors at the moment.

Neogen develops and markets food and animal safety products. The company’s Food Safety Division markets culture media and diagnostic test kits to detect foodborne bacteria, natural toxins, food allergens, drug residues, plant diseases and sanitation concerns. 

The Animal Safety division provides veterinary instruments, pharmaceuticals, vaccines, topicals, diagnostic products, rodenticides, cleaners, disinfectants, insecticides and genomics testing services for the global animal safety market. 

Factors Favoring NEOG’s Share Price Growth

Neogen’s share price is trending upward, prompted by its research and development efforts, which include new launches like Neogen MPNTray, the Listeria Right Now molecular detection assay, Igenity BCHF and MDA2 Quantitative Salmonella. The company plans to increase fiscal 2027 R&D spending by about 50%, with investment focused on Petrifilm innovation, digital connectivity, licensed technologies and next-generation pathogen detection and sanitation platforms. 

Investors are also focused on the company’s Food Safety segment’s quarterly performance. In the fourth quarter of fiscal 2026, segment revenues increased 3.1% year over year, while core growth reached 5.8%, the highest quarterly rate since fiscal 2023. Indicator Testing and Culture Media revenues rose 9.5%, while Bacterial and General Sanitation increased 9.9%. The company is also shifting toward global solutions-based selling, with resources focused on strategic accounts, disciplined segmentation and higher-return geographies. It expects this model to deepen portfolio penetration and improve customer engagement. 

Another growth prospective for Neogen is the Animal Safety business, which entered fiscal 2027 with a cleaner supply position after resolving the majority of third-party supplier issues. The company also cited better conditions in production animal markets, with higher meat prices supporting producer profitability and U.S. herd sizes showing signs of stabilization. 

Neogen’s 2022 merger with 3M’s Food Safety business is expected to generate significant long-term value for shareholders of the combined company. The merger continues to strengthen Neogen’s portfolio, with Petrifilm remaining a key asset. The company is shifting Petrifilm production to its Lansing facility, with sellable production expected to begin in November 2026.

Image Source: Zacks Investment Research

Factors That May Offset NEOG’s Gains

Neogen remains materially exposed to foreign currency movements because international sales accounted for 51.2% of fiscal 2026 revenues. The company does not hedge foreign currency translation risk, and its primary exposures include the euro, British pound and Mexican peso. Foreign currency losses increased to $5.8 million in fiscal 2026 from $3.7 million in fiscal 2025. The company’s fiscal 2027 guidance assumes a 1% negative currency impact on reported growth based on prevailing exchange rates. This exposure can create volatility in reported revenues and earnings even when underlying demand is stable.

Additionally, the company faces intense competition from businesses ranging from small firms to divisions of large multinational corporations. Some of these organizations have substantially greater financial resources than the company. These could affect the marketability and profitability of Neogen’s products.

As of the end of fiscal 2026, the company held $185.5 million in cash versus approximately $800 million in debt.

A Look at NEOG’s Estimates

The Zacks Consensus Estimate for fiscal 2027 EPS has moved north 10.7% to 31 cents in the past 30 days.

The company has an estimated long-term EPS growth rate of 10% compared with the industry’s 10.8%. 

Other Key Picks

Some other top-ranked stocks in the broader medical space are Globus Medical GMED, Veracyte VCYT and Illumina ILMN.

Globus Medical has an earnings yield of 5.8% against the industry’s negative 1.7% yield. Its earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 27.9%. GMED’s shares have rallied 42.3% against the industry’s 6.3% decline over the past year.

GMED sports a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Veracyte, sporting a Zacks Rank #1 at present, has an earnings yield of 4.6% against the industry’s negative 1.7% yield. Shares of the company have risen 38% against the industry’s 6.3% decline. VCYT’s earnings outpaced estimates in each of the trailing four quarters, the average surprise being 41.8%. 

Illumina, presently carrying a Zacks Rank #2, has an estimated long-term earnings growth rate of 13% compared with the industry’s 23% growth. Its earnings beat estimates in each of the trailing four quarters, the average surprise being 9.7%. ILMN’s shares have rallied 194.6% compared with the industry’s 24.6% growth over the past year.

Zacks' Research Chief Names "Stock Most Likely to Double"

Our team of experts has just released the 5 stocks with the greatest probability of gaining +100% or more in the coming months. Of those 5, Director of Research Sheraz Mian highlights the one stock set to climb highest.

This top pick is a little-known satellite-based communications firm. Space is projected to become a trillion dollar industry, and this company's customer base is growing fast. Analysts have forecasted a major revenue breakout in 2025. Of course, all our elite picks aren't winners but this one could far surpass earlier Zacks' Stocks Set to Double like Hims & Hers Health, which shot up +209%.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research