Craig-Hallum remains bullish on Inotiv following solid start to new year

Craig-Hallum says Inotiv Q1 results “shone” as revenues and GAAP EPS scrolled as a beat. On the call, management noted signs of improvement to the NHP situation, but indicated they are hoping to revert to contracts, which may create some near-term volatility. That said, Craig-Hallum believes management has done an “admirable job” getting the company back on track and has shown sequential and year-over-year improvement in their net book-to-bill ratio. Over time, the firm expects the company to post above-market growth with a better margin profile. Craig-Hallum continues to believe Inotiv is a CRO in the midst of a transformation. While the very near-term results will be impacted by the NHP situation, longer-term the firm expects the company to post above-industry growth with strong margins and cash flow generation. Craig-Hallum reiterates a Buy rating and $25 price target on the shares.