NEO Shorts Ease, But Options Paint a Different Picture

NeoGenomics heads into the final stretch before its July 29 earnings with a sharp tension between retreating short sellers and options traders making the most bullish bets of the year.

The options market tells the more striking story this week. Calls are swamping puts by a ratio of nearly 15-to-1 — the put/call ratio hit 0.067, within a whisker of its 52-week low of 0.066. That is more than a standard deviation below the 20-day mean of 0.085, meaning the options crowd is as undefended on the downside as it has been all year. The shift has been dramatic and sustained: back in mid-May the PCR sat above 0.15, more than twice current levels. Whatever catalysed the 27% one-month rally into mid-June, options traders have leaned into it hard — and the stock's subsequent 8% pullback this week, closing at $10.49, has not prompted them to add protection.

Short positioning meanwhile has been trimming, not building. SI has dropped roughly 16% over the past month to 6.6% of the free float, unwinding a cluster of shorts that peaked near 10.2 million shares in mid-May. The borrow market gives no sign of stress: cost to borrow is a negligible 0.52%, barely moved on the week, and availability is exceptionally loose at 652% — meaning there are more than six shares available to lend for every one currently borrowed. That is comfortably within the normal range, and the 52-week tightest point of 572% was only reached briefly on June 5. Nothing in the lending market suggests a short squeeze is a factor here in either direction; shorts who want to exit face no meaningful friction, and new shorts can enter cheaply.

The Street is cautiously constructive, though the most recent formal analyst actions are from late April and therefore somewhat dated. Around that earnings print, Leerink Partners upgraded to Outperform with a target of $25 — by far the most aggressive on the Street — while Benchmark moved to Buy at $11 and TD Cowen raised its target to $14. The consensus sits at Hold with a mean target of $15.56, implying roughly 48% upside from the current price. Bulls point to expanding margins — adjusted EBITDA margin up 200 basis points to 4.2%, gross margin at 46.8% — and an 18% surge in next-generation sequencing revenue in Q1 2025. Bears flag the persistent drag from non-clinical sales, which came in at $18.3 million against a $20.9 million consensus, along with reimbursement risk and competitive pressure. The EV/EBITDA multiple has compressed to 24x on the week's pullback, down roughly two turns from a month ago, which softens some of the valuation concern — though at those levels the stock is still pricing in meaningful margin recovery.

Institutional flows add an interesting layer. First Light Asset Management added 3.9 million shares in its most recent disclosed period, taking its stake to 10.5% of shares outstanding and making it the second-largest holder behind BlackRock. First Trust Advisors disclosed a near-complete new position of 5.9 million shares as of late May. Those are meaningful additions from active managers, and they sit awkwardly against the week's sell-off. The ORTEX short score has drifted just below 50 — squarely neutral — after holding slightly above that line earlier in June, consistent with a stock where neither the bull nor bear case has decisively taken hold.

The last three post-earnings sessions all produced gains — the most recent Q1 print on May 21 led to a 3.7% next-day move and a 14.5% five-day gain. With the next print scheduled for July 29, the degree to which the options market's current extreme call-heavy skew holds — or corrects — into that date is the clearest signal to track.