Q: I note the question and your response on this today but was wondering if you might add a comment on the current valuation and whether it is reaching fair value or not.
Thanks
Thanks
5i Research Answer:
NEO has had a good run, up 83% YTD, and this has brought valuation to 24X earnings. The balance sheet is fine and good growth is expected. This valuation is well above its historical ranges, but it has become more of a 'strategic' asset with recent developments in China and Trump's desire for sector independence. Earnings have been very volatile over the years, but in 2026 EPS growth of 75%+ is expected (consensus). We think it is approaching fair value, but if it can execute on growth then it may have a bit more room to run. We would generally consider it a good company, but it has found newfound fame this year and we do not know how long that's going to be sustainable.