Neogen Corporation (NEOG)
Profitability ratios
Return on sales
| May 31, 2025 | May 31, 2024 | May 31, 2023 | May 31, 2022 | May 31, 2021 | |
|---|---|---|---|---|---|
| Gross profit margin | 47.10% | 50.19% | 49.36% | 46.10% | 45.91% |
| Operating profit margin | -118.59% | 6.35% | 4.56% | 6.62% | 11.34% |
| Pretax margin | -122.06% | -1.55% | -2.68% | 11.42% | 16.07% |
| Net profit margin | -122.06% | -1.02% | -2.78% | 9.16% | 13.00% |
The profitability ratios of Neogen Corporation over the specified periods reveal a complex and fluctuating financial performance.
Starting with the gross profit margin, the data indicates a generally positive trend, increasing from 45.91% on May 31, 2021, to 46.10% in 2022, and further rising to 49.36% in 2023. The margin continues its upward trajectory, reaching 50.19% on May 31, 2024, before experiencing a decline to 47.10% in 2025. This pattern suggests consistent improvement in the company's core profitability, likely driven by effective cost management or pricing strategies, till the recent dip in 2025.
In contrast, the operating profit margin exhibits significant volatility. The margin diminishes from 11.34% in 2021 to 6.62% in 2022, followed by a further decrease to 4.56% in 2023. Although there is a modest recovery to 6.35% in 2024, the metric deteriorates sharply in 2025 to an extraordinary negative value of -118.59%. Such a severe negative indicates substantial operational losses or extraordinary expenses in that year, overshadowing previous improvements.
Similar trends are observed in the pretax margin, which declines from 16.07% in 2021 to 11.42% in 2022 and turns negative at -2.68% in 2023. The margin remains negative in 2024 at -1.55% and plunges further to -122.06% in 2025, highlighting a year of extraordinary losses impacting profitability before tax obligations.
The net profit margin demonstrates an initial positive performance, decreasing from 13.00% in 2021 to 9.16% in 2022. It then turns negative at -2.78% in 2023, with a slight improvement to -1.02% in 2024. However, similar to other profitability ratios, a dramatic decline occurs in 2025, with a margin of -122.06%, indicating substantial net losses.
Overall, the environmental context of Neogen Corporation’s profitability ratios displays a positive trend in gross profit margins over the years leading up to 2024, suggesting improved core profitability. Nonetheless, the sharp and unprecedented negative shifts observed in 2025 across operating, pretax, and net profit margins point to exceptional circumstances, such as extraordinary expenses, impairments, or operational disruptions that drastically reduced profitability, culminating in significant losses.
Return on investment
| May 31, 2025 | May 31, 2024 | May 31, 2023 | May 31, 2022 | May 31, 2021 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | -30.81% | 1.29% | 0.82% | 3.52% | 5.77% |
| Return on assets (ROA) | -31.71% | -0.21% | -0.50% | 4.87% | 6.62% |
| Return on total capital | 0.00% | 1.95% | 1.20% | 9.49% | 9.19% |
| Return on equity (ROE) | -52.72% | -0.30% | -0.73% | 5.44% | 7.24% |
The analysis of Neogen Corporation's profitability ratios over the period from May 31, 2021, to May 31, 2025, reveals significant fluctuations and a declining trend in recent years.
Operating Return on Assets (Operating ROA) declined from 5.77% in 2021 to 3.52% in 2022, indicating a reduction in operational efficiency. This decline continued sharply, reaching 0.82% in 2023, and further dropped to 1.29% in 2024. By 2025, the Operating ROA turned negative at -30.81%, suggesting that the company's core operations have become significantly unprofitable relative to its assets.
Return on Assets (ROA) followed a similar trajectory, decreasing from 6.62% in 2021 to 4.87% in 2022, turning negative at -0.50% in 2023, and further declining to -0.21% in 2024. The negative value in 2023 and 2024 indicates that overall assets were not generating profit, and the situation worsened substantially by 2025, with ROA plummeting to -31.71%.
Return on Total Capital experienced a slight increase from 9.19% in 2021 to 9.49% in 2022. However, this ratio sharply declined to 1.20% in 2023, then marginally improved to 1.95% in 2024, before reaching zero in 2025, signaling minimal or no returns for capital employed.
Return on Equity (ROE), which measures profitability relative to shareholders' equity, showed a consistent decline over the period. It decreased from 7.24% in 2021 to 5.44% in 2022, then shifted negative at -0.73% in 2023. The downward trend continued with a marginal negative value of -0.30% in 2024 and a steep decline to -52.72% in 2025, indicating that shareholders' investments have become substantially unprofitable, with the company effectively generating significant losses relative to equity.
Overall, the profitability ratios suggest a concerning deterioration of Neogen Corporation's profitability position from 2023 onward. The transition into negative territory across all ratios in 2023 and beyond signals operational challenges and potential issues with cost management, revenue generation, or strategic shifts adversely affecting profitability.