Neogen's (NASDAQ: NEOG) vast international trade is impacted by global macroeconomic issues. Also, a tough competitive landscape weighs on the stock. NEOG stock carries a Zacks Rank #4 (Sell).
Neogen's international business continues to be affected by currency movements.
The current macroeconomic environment has adversely impacted Neogen's financial operations. Governments and insurance companies continue to look for ways to contain the rising cost of healthcare. This might put pressure on players in the healthcare industry, with Neogen being no exception. Although the company is gradually coming out of the impact of the two-and-a-half-year-long pandemic, deteriorating international trade, with global inflationary pressure leading to a tough situation related to raw material and labor cost as well as freight charges, and a higher interest rate have put the medical device space in a tight spot.
With sustained macroeconomic pressure, the company may struggle to keep its cost of revenues and operating expenses in check. In fiscal 2024, sales and marketing expenses rose 29.5% year over year. Our model forecasts a 1.5% rise in the metric for fiscal 2025.
Further, Neogen faces intense competition from companies ranging from small businesses to divisions of large multinational companies. Some of these organizations ...
