Neogen Corporation (NEOG)
Profitability ratios
Return on sales
| May 31, 2025 | Feb 28, 2025 | Nov 30, 2024 | Aug 31, 2024 | May 31, 2024 | Feb 29, 2024 | Nov 30, 2023 | Aug 31, 2023 | May 31, 2023 | Feb 28, 2023 | Nov 30, 2022 | Aug 31, 2022 | May 31, 2022 | Feb 28, 2022 | Nov 30, 2021 | Aug 31, 2021 | May 31, 2021 | Feb 28, 2021 | Nov 30, 2020 | Aug 31, 2020 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Gross profit margin | 47.10% | 48.79% | 49.09% | 49.56% | 50.19% | 50.97% | 50.58% | 50.10% | 49.36% | 48.25% | 47.12% | 46.17% | 46.10% | 45.81% | 46.16% | 46.11% | 45.91% | 46.45% | 46.29% | 46.56% |
| Operating profit margin | -118.59% | -47.71% | -46.58% | 5.08% | 6.84% | 7.43% | 4.92% | 2.52% | 1.22% | -0.17% | 1.68% | 5.79% | 8.81% | 10.60% | 13.97% | 15.80% | 15.83% | 16.41% | 16.42% | 16.47% |
| Pretax margin | -122.06% | -56.10% | -55.20% | -3.46% | -1.55% | -0.03% | 0.36% | -2.94% | -2.68% | -1.50% | -0.30% | 8.50% | 11.42% | 11.94% | 14.07% | 15.83% | 16.07% | 16.95% | 17.21% | 17.48% |
| Net profit margin | -122.06% | -53.56% | -52.12% | -2.58% | -1.02% | 0.17% | 1.28% | -2.89% | -2.78% | -1.87% | -2.57% | 6.86% | 9.16% | 9.54% | 11.34% | 12.74% | 13.00% | 13.66% | 13.92% | 14.24% |
The profitability ratios of Neogen Corporation over the analyzed period demonstrate notable trends and fluctuations. The gross profit margin exhibits a generally positive trajectory, increasing from approximately 46.56% as of August 31, 2020, reaching an all-time high of approximately 50.97% in February 2024. This consistent upward trend indicates an improving ability to generate gross profit from sales, suggesting effective cost control relative to revenues or favorable sales mix developments.
In contrast, the operating profit margin shows a volatile pattern with an overall declining trend over time. Beginning at around 16.47% in August 2020, it experienced a steep decline, turning negative by the end of the period analyzed, with values dropping to approximately -118.59% in May 2025. Notably, there was a significant deterioration after mid-2022, with the margin turning negative in late 2022 and reaching extremely adverse levels in 2024. This indicates increasing challenges in controlling operating costs or operational inefficiencies, leading to weakened operational profitability.
The pretax margin mirrors the trend observed in operating profit margin, starting at approximately 17.48% in August 2020 and decreasing substantially into negative territory by late 2022 and throughout 2024, with a corresponding sharp decline to around -122.06% in May 2025. This alignment suggests that factors affecting operating income—such as high operating expenses or extraordinary items—had a pronounced impact on pretax profitability.
Net profit margin followed a similar pattern, declining from approximately 14.24% in August 2020, reaching near zero in 2023, and falling sharply into negative territory, hitting approximately -122.06% in May 2025. The trends across all profitability ratios indicate that, despite the gross profit margin tightening, the company's overall profitability faced significant pressures at the net level, likely due to rising costs, operational challenges, or extraordinary expenses.
Overall, while Neogen’s gross profit margin improved, profitability at the operating, pretax, and net levels weakened considerably over the period, culminating in substantial negative margins by the end of the forecast horizon. This pattern suggests a deterioration in cost control, operational efficiency, or profitability drivers beyond gross margins, leading to ongoing challenges in maintaining overall profit sustainability.
Return on investment
| May 31, 2025 | Feb 28, 2025 | Nov 30, 2024 | Aug 31, 2024 | May 31, 2024 | Feb 29, 2024 | Nov 30, 2023 | Aug 31, 2023 | May 31, 2023 | Feb 28, 2023 | Nov 30, 2022 | Aug 31, 2022 | May 31, 2022 | Feb 28, 2022 | Nov 30, 2021 | Aug 31, 2021 | May 31, 2021 | Feb 28, 2021 | Nov 30, 2020 | Aug 31, 2020 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | -30.81% | -10.71% | -10.50% | 1.03% | 1.38% | 1.51% | 0.98% | 0.51% | 0.22% | -0.03% | 0.23% | 3.15% | 4.68% | 5.56% | 7.27% | 8.26% | 8.06% | 8.39% | 8.41% | 8.54% |
| Return on assets (ROA) | -31.71% | -12.02% | -11.75% | -0.52% | -0.21% | 0.03% | 0.26% | -0.58% | -0.50% | -0.30% | -0.36% | 3.73% | 4.87% | 5.01% | 5.90% | 6.66% | 6.62% | 6.98% | 7.13% | 7.39% |
| Return on total capital | -21.59% | -16.33% | -16.13% | 1.50% | 2.04% | 4.45% | 4.56% | 3.53% | 3.53% | 1.28% | 0.99% | 7.46% | 7.65% | 8.01% | 9.19% | 9.00% | 8.83% | 9.14% | 9.15% | 9.33% |
| Return on equity (ROE) | -52.72% | -18.24% | -17.85% | -0.75% | -0.30% | 0.05% | 0.37% | -0.84% | -0.73% | -0.43% | -0.52% | 4.12% | 5.44% | 5.61% | 6.59% | 7.26% | 7.24% | 7.61% | 7.76% | 8.07% |
The analysis of Neogen Corporation's profitability ratios over the period from August 2020 to May 2025 reveals significant volatility and a concerning downward trend in recent years.
Starting with Operating Return on Assets (Operating ROA), the ratio experienced a general decline from a high of 8.54% in August 2020 to notably negative territory by November 2024, reaching -10.50%, and further deteriorating to -30.81% by May 2025. This indicates that the company's core operations, relative to its assets, progressively became less efficient and increasingly unprofitable, culminating in substantial operational losses.
Similarly, the Return on Assets (ROA) reflected a declining trend, moving from 7.39% in August 2020 to near-zero levels and then turning negative from November 2022 onwards. The ratio plummeted to -12.02% by February 2025, marking a severe deterioration in overall asset utilization efficiency.
The Return on Total Capital, which measures profitability concerning all capital invested, showed a consistent decline over the period, with a brief positive recovery in late 2023 and early 2024. However, this metric ultimately fell into negative territory, reaching -21.59% in May 2025, a clear signal of declining profitability across all capital sources.
Return on Equity (ROE) followed a similar pattern of deterioration, starting at 8.07% in August 2020 and gradually declining over time. From a modest positive in early periods, it turned negative after November 2022, reaching -52.72% in May 2025. This indicates that shareholders' equity is generating no returns and is experiencing substantial losses, which could be due to declining net income, diminishing asset values, or increased liabilities.
Overall, the data depict a timeline where Neogen Corporation experienced stable profitability in the early years, as reflected by relatively high ROA, Operating ROA, ROE, and Return on Total Capital. However, beginning around late 2021 to early 2022, these ratios show a downward trajectory, with recent figures indicating substantial negative profitability. This trend suggests potential operational challenges, increased costs, or other adverse factors impacting the company's ability to generate earnings from its assets and equity, raising concerns about its long-term financial sustainability.