Neogen Corporation (NEOG)

Return on equity (ROE)

May 31, 2024 May 31, 2023 May 31, 2022 May 31, 2021 May 31, 2020
Net income US$ in thousands -9,421 -22,870 48,307 60,882 59,475
Total stockholders’ equity US$ in thousands 3,144,140 3,134,220 887,374 840,377 725,177
ROE -0.30% -0.73% 5.44% 7.24% 8.20%

May 31, 2024 calculation

ROE = Net income ÷ Total stockholders’ equity
= $-9,421K ÷ $3,144,140K
= -0.30%

Neogen Corporation's return on equity (ROE) has experienced a declining trend over the past few years. In May 2020, the ROE stood at 8.20%, indicating that for each dollar of equity invested, the company generated 8.20 cents in profit. However, by May 2024, the ROE had decreased to -0.30%, signifying that the company was operating at a loss in terms of shareholder equity.

The decreasing ROE trend suggests that Neogen Corporation's profitability and efficiency in utilizing shareholder equity have been weakening. An ROE below zero (negative ROE) indicates that the company is not generating sufficient profits to cover its equity investments, which can be a concerning sign for investors.

It is important for Neogen Corporation to closely evaluate its financial performance, operational efficiency, and strategic decisions to reverse the declining ROE trend and improve shareholder value in the future.