Neogen Corporation (NEOG)

Return on equity (ROE)

May 31, 2025 May 31, 2024 May 31, 2023 May 31, 2022 May 31, 2021
Net income US$ in thousands -1,092,040 -9,421 -22,870 48,307 60,882
Total stockholders’ equity US$ in thousands 2,071,250 3,144,140 3,134,220 887,374 840,377
ROE -52.72% -0.30% -0.73% 5.44% 7.24%

May 31, 2025 calculation

ROE = Net income ÷ Total stockholders’ equity
= $-1,092,040K ÷ $2,071,250K
= -52.72%

The return on equity (ROE) of Neogen Corporation has exhibited significant variability over the period from May 31, 2021, to May 31, 2025. During the fiscal year ending May 31, 2021, the ROE stood at 7.24%, indicating a modest level of profitability relative to shareholders’ equity. This figure declined notably to 5.44% by May 31, 2022, reflecting a reduction in net income generated per dollar of equity, though still maintaining a positive profitability margin.

A further substantial deterioration occurred by May 31, 2023, when the ROE turned negative at -0.73%. This transition from positive to negative ROE suggests that the company experienced losses during that year, eroding shareholders’ equity and indicating difficulties in generating sufficient profitability. The downward trend continued into the fiscal year ending May 31, 2024, with the ROE marginally improving to -0.30%, yet still remaining negative. This slight improvement indicates a reduction in losses, but the company continued to operate at a loss relative to shareholder equity.

The most pronounced decline was observed by May 31, 2025, when the ROE dramatically plunged to -52.72%. This extreme negative ROE signals substantial losses relative to equity, potentially due to significant operational challenges, extraordinary expenses, or other adverse factors impacting profitability. The stark shift from a modest positive return in 2021 to a deeply negative figure in 2025 indicates a severe deterioration in the company's profitability metrics over this timeframe.

Overall, the data demonstrates a trend of declining profitability for Neogen Corporation, culminating in a substantial negative ROE by the 2025 fiscal year. This trajectory warrants closer examination of underlying financial statements to identify specific causes, such as operational losses, increased expenses, or asset impairments that have contributed to this persistent negative trend.