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Can Myriad Genetics (MYGN) Spring a Surprise in Q3 Earnings?
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Myriad Genetics, Inc. (MYGN - Free Report) is scheduled to report third-quarter fiscal 2017 results on May 2, after the closing bell.
Last quarter, the company posted a positive earnings surprise of 8.33%. However, Myriad Genetics missed the Zacks Consensus Estimate in the trailing four quarters at an average of 0.15%.
Factors at Play
In the second quarter of fiscal 2017, Myriad Genetics witnessed 10% sequential growth in Vectra DA test volumes. Management had expected volumes to rise further in the third quarter on account of the company’s correct analysis of AMPLE data related to the test. We are therefore optimistic about this positive trend to continue in the upcoming quarter as well.
Meanwhile, management has been pursuing a number of initiatives related to different testing products. The company launched its landmark EndoPredict test in the U.S. for patients with early-stage breast cancer. Moreover, Myriad Genetics presented favorable findings from its BRACAnalysis CDx test which successfully identified patients with metastatic breast cancer.
Myriad Genetics had earlier partnered with BeiGene, a clinical-stage biopharmaceutical company for companion diagnostic development and also plans to start selling hereditary cancer testing to urologists starting the third quarter. This move is in line with the company’s developmental strategy to distribute products through multiple sales channels and garner operating leverage. We expect these developments to boost the top line in the third quarter itself.
Moving on to the newly acquired Assurex Health, management has so far integrated two-thirds of its operations. Myriad Genetics had previously projected to successfully complete the integration process by the end of fiscal third quarter.
On the flip side, the company is currently plagued by several issues that may hamper its overall performance in the yet-to-be-reported quarter. Of late, the company has been delivering poor hereditary cancer revenue numbers, primarily impacted by volume declines and price reduction. We note that the reduction in pricing was primarily led by the full implementation of long-term contracts signed by the company last year.
We are also concerned about the unfavorable foreign currency translation. With a considerable portion of its revenues coming from outside the U.S, the company faces the risk of exchange rate fluctuations. Additionally, macroeconomic uncertainty and higher expenses owing to extensive pipeline of some tests may impact the company’s margins in the third quarter as well.
Earnings Whispers
Our proven model does not conclusively show that Myriad Geneticsis likely to beat estimates this quarter. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. However, that is not the case here, as you will see below.
Zacks ESP: Myriad Geneticshas an Earnings ESP of 0.00%. That is because both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at 24 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Myriad Genetics’Zacks Rank #3 increases the predictive power of ESP. However, the company’s 0.00% ESP makes surprise prediction difficult.
Meanwhile, we caution against stocks with a Zacks Rank #4 or 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks to Consider
Here are some companies you may consider as our model shows that they have the right combination of elements to post an earnings beat in the upcoming quarter:
Hill-Rom Holdings Inc has an Earnings ESP of +1.27% and a Zacks Rank #2.
Syros Pharmaceuticals, Inc. (SYRS - Free Report) has an Earnings ESP of +5.77% and a Zacks Rank #2.
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Can Myriad Genetics (MYGN) Spring a Surprise in Q3 Earnings?
Myriad Genetics, Inc. (MYGN - Free Report) is scheduled to report third-quarter fiscal 2017 results on May 2, after the closing bell.
Last quarter, the company posted a positive earnings surprise of 8.33%. However, Myriad Genetics missed the Zacks Consensus Estimate in the trailing four quarters at an average of 0.15%.
Factors at Play
In the second quarter of fiscal 2017, Myriad Genetics witnessed 10% sequential growth in Vectra DA test volumes. Management had expected volumes to rise further in the third quarter on account of the company’s correct analysis of AMPLE data related to the test. We are therefore optimistic about this positive trend to continue in the upcoming quarter as well.
Myriad Genetics, Inc. Price and EPS Surprise
Myriad Genetics, Inc. Price and EPS Surprise | Myriad Genetics, Inc. Quote
Meanwhile, management has been pursuing a number of initiatives related to different testing products. The company launched its landmark EndoPredict test in the U.S. for patients with early-stage breast cancer. Moreover, Myriad Genetics presented favorable findings from its BRACAnalysis CDx test which successfully identified patients with metastatic breast cancer.
Myriad Genetics had earlier partnered with BeiGene, a clinical-stage biopharmaceutical company for companion diagnostic development and also plans to start selling hereditary cancer testing to urologists starting the third quarter. This move is in line with the company’s developmental strategy to distribute products through multiple sales channels and garner operating leverage. We expect these developments to boost the top line in the third quarter itself.
Moving on to the newly acquired Assurex Health, management has so far integrated two-thirds of its operations. Myriad Genetics had previously projected to successfully complete the integration process by the end of fiscal third quarter.
On the flip side, the company is currently plagued by several issues that may hamper its overall performance in the yet-to-be-reported quarter. Of late, the company has been delivering poor hereditary cancer revenue numbers, primarily impacted by volume declines and price reduction. We note that the reduction in pricing was primarily led by the full implementation of long-term contracts signed by the company last year.
We are also concerned about the unfavorable foreign currency translation. With a considerable portion of its revenues coming from outside the U.S, the company faces the risk of exchange rate fluctuations. Additionally, macroeconomic uncertainty and higher expenses owing to extensive pipeline of some tests may impact the company’s margins in the third quarter as well.
Earnings Whispers
Our proven model does not conclusively show that Myriad Geneticsis likely to beat estimates this quarter. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. However, that is not the case here, as you will see below.
Zacks ESP: Myriad Geneticshas an Earnings ESP of 0.00%. That is because both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at 24 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Myriad Genetics’Zacks Rank #3 increases the predictive power of ESP. However, the company’s 0.00% ESP makes surprise prediction difficult.
Meanwhile, we caution against stocks with a Zacks Rank #4 or 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks to Consider
Here are some companies you may consider as our model shows that they have the right combination of elements to post an earnings beat in the upcoming quarter:
Galectin Therapautics, Inc. (GALT - Free Report) has an Earnings ESP of +13.33% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Hill-Rom Holdings Inc has an Earnings ESP of +1.27% and a Zacks Rank #2.
Syros Pharmaceuticals, Inc. (SYRS - Free Report) has an Earnings ESP of +5.77% and a Zacks Rank #2.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging
phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020. Click here for the 6 trades >>