Why Neogen (NEOG) Stock Is Down Today

What Happened?

Shares of life sciences company Neogen (NASDAQ:NEOG) fell 24% in the afternoon session after the company provided updated Q4 fiscal 2025 outlook that pointed to temporary headwinds impacting gross margin, though sales are expected to remain in line with the previous estimates. The company also anticipated a nearly $5 million impact from tariffs and announced strategic divestitures, which are expected to weigh heavily on growth and profits.

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What The Market Is Telling Us

Neogen’s shares are very volatile and have had 29 moves greater than 5% over the last year. But moves this big are rare even for Neogen and indicate this news significantly impacted the market’s perception of the business.

The previous big move we wrote about was 23 days ago when the stock gained 9.1% on the news that the major indices popped (Nasdaq +3.4%, S&P 500 +2.5%) in response to the positive outcome of U.S.-China trade negotiations, as both sides agreed to pause some tariffs for 90 days, signaling a potential turning point in ongoing tensions. 

This rollback cuts U.S. tariffs on Chinese goods to 30% and Chinese tariffs on U.S. imports to 10%, giving companies breathing room to reset inventories and supply chains. 

However, President Trump clarified that tariffs could go "substantially higher" if a full deal with China wasn't reached during the 90-day pause, but not all the way back to the previous levels. Still, the agreement has cooled fears of a prolonged trade war, helping stabilize expectations for global growth and trade flows and fueling renewed optimism. The optimism appeared concentrated in key trade-sensitive sectors, particularly technology, retail, and industrials, as lower tariffs reduce cost pressures and restore cross-border demand.

Neogen is down 61.6% since the beginning of the year, and at $4.59 per share, it is trading 74.1% below its 52-week high of $17.71 from July 2024. Investors who bought $1,000 worth of Neogen’s shares 5 years ago would now be looking at an investment worth $128.86.

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