Neogenomics stock price target lowered to $8 at Needham on weak guidance

Investing.com - Neogenomics (NASDAQ:NEO) received a price target cut from Needham on Tuesday, with the firm lowering its target to $8.00 from $8.50 while maintaining a Buy rating on the stock. Currently trading at $5.11, the stock appears undervalued according to InvestingPro analysis, despite falling 55.66% over the past six months.

The price target reduction follows Neogenomics’ second-quarter 2025 results, which showed revenue and EBITDA missing consensus expectations, though earnings per share slightly beat analyst estimates. Management also lowered its full-year 2025 revenue and EBITDA guidance. InvestingPro data shows the company maintaining a healthy current ratio of 2.05, indicating strong short-term liquidity despite recent challenges.

The company’s organic revenue growth remained relatively stable at approximately 8% in the second quarter of 2025 compared to 7.5% in the first quarter. This stability resulted from 13% organic growth (16% reported) in the Clinical segment being offset by a 26% decline in the Non-Clinical segment.

Neogenomics reported adjusted gross margin down 190 basis points year-over-year, primarily driven by the Pathline acquisition, while adjusted EBITDA margin decreased 70 basis points compared to the same period last year.

Management maintained its long-term growth rate target of 12-13%, clarifying that this would consist of double-digit core growth of at least 10%, with the additional 2-3% expected to come from new products or mergers and acquisitions.

In other recent news, NeoGenomics reported its Q2 2025 earnings, revealing a mixed financial performance. The company achieved an earnings per share (EPS) of $0.03, surpassing the projected $0.02, marking a 50% beat. However, NeoGenomics’ revenue fell short of expectations, coming in at $181 million compared to the anticipated $183 million. Despite the positive EPS result, the market’s reaction was unfavorable. Additionally, William Blair downgraded NeoGenomics from Outperform to Market Perform. The downgrade was attributed to concerns about the time required to rebuild investor confidence. These developments have contributed to recent fluctuations in NeoGenomics’ market performance.

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