NeoGenomics, Inc. (NASDAQ:NEO) shares are getting hammered Tuesday after the cancer diagnostics company announced the abrupt resignation of CEO Mark Mallon and warned of the first-quarter shortfall while also withdrawing its full-year guidance.
The NeoGenomics Analyst: BofA Securities analyst Derik de Bruin downgraded NeoGenomics shares from Buy to Neutral and reduced the price target from $25 to $18.
The NeoGenomics Thesis: NeoGenomics will now be managed by an interim office, comprising of CFO William Bonello, Chief Strategy and Corporate Development Officer Douglas Brown and Chief Culture Officer Jennifer Balliet, BofA analyst de Bruin said.
Core oncology test volumes haven't yet recovered as expected and there were some incremental headwinds from COVID-19 in the first quarter, the analyst said, citing his checks with the company's management.
NeoGenomics' management sees this as more of a company-specific issue than an industry-wide problem, de Burin said. The company's cost structure isn't optimal and more automation and other initiatives are required to improve productivity, he added.
Overall, the analyst said he is surprised at the development, especially as the company appeared to be making steady progress.
NEO Price Action per Benzinga Pro: At last check Tuesday morning, NeoGenomics shares were plunging 34.81% to $11.67.
