Neogen Corporation (NEOG): A Bull Case Theory 

We came across a bullish thesis on Neogen Corporation on Valueinvestorsclub.com by Dr. Ridgewell. In this article, we will summarize the bulls’ thesis on NEOG. Neogen Corporation’s share was trading at $5.92 as of December 1st. NEOG’s trailing and forward P/E were 822.50 and 16.00 respectively according to Yahoo Finance.

Neogen presents a compelling opportunity to invest in a high-quality food and animal safety platform that has undergone significant operational strain but is now approaching an inflection point. Following its 2022 merger with 3M’s Food Safety division—a deal that doubled the share count, added $1 billion of debt, and required heavy capital investments—the company struggled with duplicative manufacturing costs, delays in transitioning 3M’s high-margin Petrifilm production, and a sprawling portfolio lacking strategic focus.

These issues drove the stock down more than 80% from pre-deal levels, pushing valuation to ~10x FY27 EBITDA—near financial-crisis lows despite Neogen owning some of the industry’s most valuable testing, sanitation, and sampling assets. With the integration now in its final stages and Petrifilm SKU certifications progressing over the next four to five quarters, the company is close to unlocking the margin benefits embedded in its new $208 million Lansing facility, while capex is set to fall sharply in FY26.

A major turning point arrived with the August 2025 hiring of Mike Nassif—an operator known for portfolio rationalization and complex diagnostics turnarounds. Under his leadership, Neogen has begun divesting lower-quality businesses, starting with the $130 million sale of its cleaners and disinfectants unit, using proceeds to accelerate deleveraging. A sale or restructuring of the genomics business is likely next and could reduce leverage by another 0.5x–1.0x while sharpening Neogen’s focus on its higher-growth bovine segment.

With improved business quality, enhanced asset backing, clearer integration visibility, and a leadership team incentivized through refreshed LTIP structures, Neogen is positioned for meaningful rerating. If execution continues and Petrifilm ramps as expected, the stock could potentially triple over the next two years, supported by stronger free cash flow, lower leverage, and renewed investor confidence.

Previously we covered a bullish thesis on IDEXX Laboratories, Inc. (IDXX) by Hidden Market Gems in March 2025, highlighting its leadership in veterinary diagnostics and high-margin recurring revenue. The stock has appreciated by 70.84% since then, as strong diagnostic demand validated the thesis. It still stands, supported by durable animal-health tailwinds. Dr. Ridgewell echoes this view while contrasting Neogen’s restructuring-led inflection.

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Disclosure: None.