March earnings were weak with a big miss on EPS and revenue which caused the stock to fall. This negative earnings trend continued in May earnings with another miss on both, however, the stock popped on recording a small adjusted profit and adjusted EBITDA rising to $10.8M from $0.8M the year prior. The stock is up 13% at the time of writing as news came out today that NEO will be doing a "Strategic Review Process Intended to Maximize Shareholder Value." This review hinted at a potential sale, merger, divestiture, etc. Prior to this news we thought it was a weak hold and the China slowdown had hurt the company. Forecasts for growth were a decline in revenue for 2024. In 2025 revenue growth forecast was 10% and EPS is 68%. We would not buy on the recent price action from the stock and prior earnings trends were not entirely positive. Valuation is high, but of course a sale is still possible here. But with the recent increase and speculation the potential return on a sale has decreased. These reviews can also take lots of time, and the stock is likely to settle down if nothing happens for several months or longer.
5i Research Answer: