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    Neogen (NEOG): Reassessing Valuation After Investor Lawsuit Over 3M Integration Disclosures

    Simply Wall St·12/17/2025 05:19:46
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    Neogen (NEOG) is back in the spotlight after a pending investor lawsuit accused the company of downplaying integration problems tied to its large 3M deal and potentially skewing how investors viewed its financial health.

    See our latest analysis for Neogen.

    Despite the legal overhang, traders have leaned into the story recently. A 90 day share price return of about 29 percent has partly clawed back a year to date share price return of around negative 41 percent, so momentum is improving off a still weak long term total shareholder return base.

    If this kind of volatility has you thinking more broadly about healthcare exposure, it could be worth exploring other healthcare stocks that might offer stronger momentum or sturdier fundamentals.

    With the stock still deeply underwater over three and five years but now rebounding and trading below the average analyst target, are investors looking at a genuine value reset here, or is the market already factoring in a smoother integration and stronger growth?

    Most Popular Narrative Narrative: 13.8% Undervalued

    With Neogen last closing at $7.04 against a narrative fair value near $8.17, the story assumes a material recovery in profitability and valuation multiples ahead.

    Operational improvements and automation at the new Petrifilm production facility, alongside targeted actions to reduce inefficiencies in sample collection and inventory management, are expected to drive gross margin and EBITDA margin improvements over the coming quarters as execution stabilizes and overhead absorption rates improve.

    Read the complete narrative.

    Curious how an unprofitable business today ends up with healthy margins and a mid teens earnings multiple tomorrow? Want to see the exact roadmap those projections rely on? Dive into the narrative to unpack the revenue glide path, margin reset, and share count assumptions that are doing the heavy lifting behind that fair value.

    Result: Fair Value of $8.17 (UNDERVALUED)

    Have a read of the narrative in full and understand what's behind the forecasts.

    However, persistent 3M integration setbacks and prolonged macro softness could delay margin recovery and challenge the pace of any valuation reset investors are banking on.

    Find out about the key risks to this Neogen narrative.

    Build Your Own Neogen Narrative

    If you see things differently or want to stress test the assumptions yourself, you can spin up a custom narrative in just a few minutes: Do it your way

    A great starting point for your Neogen research is our analysis highlighting 1 important warning sign that could impact your investment decision.

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    This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.