Piper Sandler maintains Neogenomics stock with $18 target

Published 19/03/2025, 14:52
Piper Sandler maintains Neogenomics stock with $18 target

On Tuesday, Piper Sandler reaffirmed its Overweight rating and $18.00 price target for Neogenomics (NASDAQ: NEO) shares, currently trading at $9.59. The endorsement comes in the wake of significant management changes, including the recent appointment of Warren Stone as COO and president. This move is perceived as a step towards reinforcing management stability following a 48% decline in Neogenomics’ stock value since the announcement of CEO Chris Smith’s departure, with the stock now trading near its 52-week low of $8.98.

Piper Sandler analysts believe that the company’s management team is more cohesive now than it was two years ago. They expressed confidence that Stone, alongside incoming-CEO Tony Zook, will facilitate a smooth transition and potentially serve as a future leader for the company. According to InvestingPro data, despite current losses, the company has maintained strong revenue growth of 11.65% over the last twelve months, and analysts expect profitability this year. The analysts emphasized that with a dedicated management team, Neogenomics is well-positioned to continue its trajectory of success.

The appointment of Warren Stone was announced on Tuesday morning, signaling Neogenomics’ commitment to addressing investor concerns over management consistency. Piper Sandler’s commentary suggests that Stone’s role will be pivotal in ensuring that the leadership shift from Smith to Zook does not disrupt the company’s operations.

The analysts also highlighted that Neogenomics has historically performed well and, with the current team in place, they expect the company to maintain its positive momentum. The reiterated price target of $18.00 reflects Piper Sandler’s ongoing optimism about the company’s prospects despite the recent challenges in the executive suite. InvestingPro analysis reveals that analyst targets range from $16 to $26, suggesting significant upside potential. Subscribers can access 8 additional ProTips and comprehensive financial metrics in the Pro Research Report.

Investors have been closely monitoring the company’s executive dynamics, especially considering the stock’s significant drop after the CEO change announcement. Neogenomics’ effort to solidify its leadership structure is seen as a critical factor in regaining investor confidence and driving future growth.

In other recent news, NeoGenomics (NASDAQ:NEO) reported its fourth-quarter 2024 earnings, presenting a mixed financial performance. The company achieved earnings per share (EPS) of $0.04, surpassing the expected $0.03, but revenue fell short, totaling $172 million compared to the forecasted $173.05 million. For the full year 2024, NeoGenomics experienced a 17% decline in revenue, amounting to $476 million, although it saw a 70% increase in adjusted EBITDA, reaching $64 million. The company is expanding its permanent magnet facilities in Europe, aiming to enhance its growth strategy. Looking forward, NeoGenomics projects a decrease in adjusted EBITDA for 2025, estimating between $55 million and $60 million. The company anticipates a slight revenue decline but remains focused on expanding its permanent magnet business, including a new facility in Estonia. CEO Raheem Solan emphasized the company’s strategic initiatives, highlighting efforts to diversify its supply chain and expand its market presence.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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