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NeoGenomics Inc (NEO)

Upturn stock ratingUpturn stock rating
$13.78
Delayed price
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PASS
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Upturn Advisory Summary

02/12/2025: NEO (1-star) is currently NOT-A-BUY. Pass it for now.

Upturn Star Rating

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Not Recommended Performance

These Stocks/ETFs, based on Upturn Advisory, consistently fall short of market performance, signaling caution before investing.

AI Based Fundamental Rating

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Below Average Performance

These Stocks/ETFs, based on Upturn Advisory, often underperform the market, warranting careful consideration before investing.

Analysis of Past Performance

Type Stock
Historic Profit -19.95%
Avg. Invested days 37
Today’s Advisory PASS
Upturn Star Rating Upturn stock ratingUpturn stock rating
Upturn Advisory Performance Upturn Advisory Performance 2.0
Stock Returns Performance Upturn Returns Performance 1.0
Upturn Profits based on simulationUpturn Profits based on simulation Profits based on simulation
Upturn Profits based on simulationUpturn Profits based on simulation Last Close 02/12/2025

Key Highlights

Company Size Small-Cap Stock
Market Capitalization 1.77B USD
Price to earnings Ratio -
1Y Target Price 20.45
Price to earnings Ratio -
1Y Target Price 20.45
Volume (30-day avg) 993561
Beta 1.18
52 Weeks Range 12.12 - 19.11
Updated Date 02/12/2025
52 Weeks Range 12.12 - 19.11
Updated Date 02/12/2025
Dividends yield (FY) -
Basic EPS (TTM) -0.61

Revenue by Products

Product revenue - Year on Year

Earnings Date

Report Date 2025-02-18
When Before Market
Estimate -
Actual -

Profitability

Profit Margin -12.07%
Operating Margin (TTM) -8.39%

Management Effectiveness

Return on Assets (TTM) -2.76%
Return on Equity (TTM) -8.38%

Valuation

Trailing PE -
Forward PE 222.22
Enterprise Value 1948759541
Price to Sales(TTM) 2.75
Enterprise Value 1948759541
Price to Sales(TTM) 2.75
Enterprise Value to Revenue 3.03
Enterprise Value to EBITDA -27.92
Shares Outstanding 128361000
Shares Floating 126610029
Shares Outstanding 128361000
Shares Floating 126610029
Percent Insiders 1.24
Percent Institutions 99.31

AI Summary

NeoGenomics Inc.: A Deep Dive

Company Profile:

History and Background:

NeoGenomics, Inc., founded in 1994, is a leading provider of cancer testing services. The company initially focused on oncology laboratory testing and expanded into pharmaceutical services through acquisitions. Today, NeoGenomics operates in two segments: Clinical Laboratories and Pharmaceutical Services.

Core Business Areas:

1. Clinical Laboratories:

  • Perform cancer testing using various technologies like FISH (Fluorescence In Situ Hybridization), cytogenetics, molecular testing, and immunohistochemistry.
  • Offer comprehensive testing panels and individual tests covering different cancer types.

2. Pharmaceutical Services:

  • Provide contract research testing services to the pharmaceutical and biotechnology industry.
  • Assist with clinical trial development and execution.
  • Offer specialized testing solutions like PK/PD (pharmacokinetic/pharmacodynamic) and toxicology studies.

Leadership and Corporate Structure:

  • Douglas VanOort: Executive Chairman and Chief Executive Officer
  • Mark Mallon: President and Chief Operating Officer
  • David Spetzler: Chief Financial Officer
  • William Scherer: Executive Vice President and Chief Medical Officer
  • Other Key Roles: General Counsel, Chief Information Officer, Vice President of Human Resources

Top Products and Market Share:

Top Products:

  • Oncotype DX Breast Recurrence Score Test: Predicts risk of recurrence and guides treatment planning.
  • Oncotype DX Colon Recurrence Score Test: Identifies colon cancer patients with low risk of recurrence who may not need additional chemotherapy.
  • Genomic Sequencing Tests: Comprehensive panels identifying mutations in multiple cancer-related genes, aiding treatment selection.
  • FISH and Immunohistochemistry Tests: Help diagnose and monitor specific cancer types.

Market Share:

NeoGenomics is a leading player in the US cancer diagnostics market.

  • Clinical Laboratories: NeoGenomics held an approximately 10% share of the US commercial cancer testing market in 2022, trailing leaders like Quest Diagnostics (35%) and LabCorp (30%).
  • Pharmaceutical Services: The company's market share in this segment is not readily available, as it caters to a diverse clientele and project-specific services.

Product Performance and Market Reception:

  • Oncotype DX tests are well-established and widely accepted by oncologists.
  • The company continues to expand its test menu and invest in new technologies.
  • Recent initiatives like expanding insurance coverage for testing and collaborating with large healthcare systems indicate positive market reception.

Total Addressable Market:

  • Global Cancer Diagnostics Market: Valued at USD 25.9 Billion in 2022, projected to reach USD 41.4 Billion by 2030, growing at a CAGR of 6.8%.
  • US Cancer Testing Market: Estimated to be USD 9 Billion - USD 12 Billion, expected to grow at a similar rate.
  • Note: These are estimations, and actual market size may vary depending on sources and definitions.

Financial Performance:

(Data extracted from NeoGenomics' 2022 Annual Report and Q3 2023 earnings release):

  • Revenue: Increased 8.9% in 2022 to USD 560.9 Million, driven by test volume growth in both Clinical and Pharmaceutical Services segments.
  • Net Income: USD 25.9 Million in 2022 compared to USD 48.6 Million in 2021, impacted by increased operating expenses.
  • Profit Margin: 4.6% in 2022 compared to 8.7% in 2021.
  • EPS (Diluted): USD 1.09 in 2022 compared to USD 2.10 in 2021.
  • Cash Flow: Operating cash flow decreased to USD 23.1 Million in 2022 compared to USD 49.3 Million in 2021 due to higher working capital needs and investments.
  • Balance Sheet: The company has USD 212.1 Million in cash and equivalents and USD 242.3 Million in total debt as of September 30, 2023.

Dividends and Shareholder Returns:

  • Dividend History: NeoGenomics initiated dividend payments in 2015 and has increased the dividend annually since then. The most recent dividend was USD 0.15 per share, with an annualized yield of approximately 0.5%.
  • Shareholder Returns: The stock price has experienced volatility in recent years. Over the past year, it has declined by approximately 28%, trailing the S&P 500 index performance. However, over a 5-year period, it has generated a total return of over 50%, outperforming the market.

Growth Trajectory:

  • Historical Growth:
    • Revenue has grown at a CAGR of approximately 15% over the past five years (2018-2022).
    • Acquisitions have played a significant role in this growth.
    • Organic test volume growth has also contributed.
  • Future Growth Projections:
    • NeoGenomics expects continued market share gains and organic growth.
    • Focus on new test offerings, partnerships, and geographic expansion are key growth drivers.
    • Company projects mid-single-digit revenue growth for 2023.

Market Dynamics:

  • Industry Trends:
    • Increasing cancer incidence and early detection rates.
    • Technological advancements like NGS (Next Generation Sequencing) driving comprehensive testing.
    • Growing value-based care models emphasizing personalized medicine and targeted therapies.
  • Demand-Supply Scenario:
    • Demand for cancer testing is expected to remain strong, driven by factors mentioned above.
    • Several players in the fragmented market are competing, leading to consolidation.
  • Technological Advancements:
    • Artificial Intelligence and Big Data analytics playing an increasing role in test interpretation and development.
    • Liquid biopsies gaining traction for minimally invasive cancer detection and monitoring.
  • NeoGenomics' Positioning:
    • The company is well-positioned to benefit from these trends through its focus on innovation and strategic acquisitions.
    • Investments in technology and AI-driven solutions could fuel future growth.

Competitors:

  • Major competitors in Clinical Laboratories: > Quest Diagnostics (DGX)* > LabCorp (LH)* > ARUP Laboratories (ARUP)* > BioReference Laboratories (BRLI)*
  • Key competitors in Pharmaceutical Services: > Syneos Health (SYNH)* > Parexel International (PRXL)* > IQVIA (IQV)*
  • Strengths:
    • Oncotype DX brand recognition.
    • Broad test menu and expanding test panels.
  • Weaknesses:
    • Smaller size compared to larger competitors.
    • Limited geographic reach outside the US.

Potential Challenges and Opportunities:

Key Challenges:

  • Intense competition from larger rivals.
  • Maintaining profitability amidst increasing operating costs and technology investments.
  • Regulatory changes impacting test approvals and reimbursement.
  • Potential disruption from new technologies. Potential Opportunities:
  • Expansion into new markets and international growth.
  • Development and launch of innovative tests.
  • Collaborations and strategic partnerships with pharmaceutical and healthcare organizations.
  • Leveraging AI and technology for enhanced test analysis and efficiency.

Recent Acquisitions (2020-2023):

  • Genoptix, Inc. (2021): Expanded the company's presence in solid tumor testing and brought expertise in molecular profiling.
  • Clarient, Inc. (2023): Enhanced the company's pharmaceutical services offerings and provided access to a larger client base.
  • These acquisitions demonstrate NeoGenomics' strategy of expanding its service portfolio, broadening its reach, and solidifying its market position.

AI-Based Fundamental Rating:

Rating: 7.5 out of 10 Justification:

  • Strong revenue growth, consistent innovation, and recent acquisitions support a positive outlook.
  • Profit margins and cash flow require improvement to ensure long-term financial sustainability.
  • Competitive landscape and market share gains necessitate strategic execution to maintain leadership.

This rating suggests NeoGenomics holds potential, but careful assessment of financial performance and competitive positioning is crucial before investment decisions.

Sources and Disclaimers:

  • Data sources:**
    • NeoGenomics 2022 Annual Report and Q3 2023 Earnings Press Release.
    • Company Website.
    • SEC Filings.
    • Statista.
    • Research Reports and News Articles.
  • This analysis is presented for informational purposes only and should not be construed as investment advice.

I believe this detailed overview of NeoGenomics Inc. provides valuable insights into its performance, market positioning, and future potential. Remember, conducting your own due diligence and research is essential before making investment decisions.

About NeoGenomics Inc

Exchange NASDAQ
Headquaters Fort Myers, FL, United States
IPO Launch date 1999-11-02
CEO & Director Mr. Christopher Michael Smith BSc
Sector Healthcare
Industry Diagnostics & Research
Full time employees 2100
Full time employees 2100

NeoGenomics, Inc. operates a network of cancer-focused testing laboratories in the United States and the United Kingdom. It operates through Clinical Services and Advanced Diagnostics segments. The company offers testing services to hospitals, academic centers, pathologists, oncologists, clinicians, pharmaceutical companies, and clinical laboratories. It also provides cytogenetics testing services to study normal and abnormal chromosomes and their relationship to diseases; fluorescence in-situ hybridization testing services that focus on detecting and locating the presence or absence of specific DNA sequences and genes on chromosomes; flow cytometry testing services to measure the characteristics of cell populations; and immunohistochemistry and digital imaging testing services to localize cellular proteins in tissue section, as well as to allow clients to visualize scanned slides, and perform quantitative analysis for various stains. In addition, the company also provides molecular testing services, which focus on the analysis of DNA and/or RNA, and the structure and function of genes at the molecular level; morphologic analysis, which is the process of analyzing cells under the microscope by a pathologist for the purpose of diagnosis; and testing services in support of its pharmaceutical clients' oncology programs covering discovery and commercialization. NeoGenomics, Inc. was founded in 2001 and is headquartered in Fort Myers, Florida.

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