Myriad Genetics, Inc. ( MYGN Quick Quote MYGN - Free Report) has been gaining from continuous recovery in testing volumes. The robust revenue contribution from the company’s proprietary myChoiceCDx test is impressive. However, declining sales and unfavorable foreign exchange fluctuations do not bode well.
In the past year, this Zacks Rank #3 (Hold) stock has lost 42.5% compared with the 41.5% decline of the
industry and 18.1% plunge of the S&P 500.
The renowned molecular diagnostic company has a market capitalization of $1.51 billion. The company’s earnings surpassed estimates in two of the trailing four quarters, met on one occasion and missed in one, delivering an average negative surprise of 40%.
Let’s delve deeper.
Factors at Play Q2 Upsides: Myriad Genetics exited the second quarter with better-than-expected earnings and revenues. Robust performance across the Women’s Health business bodes well. The improvement in pharmacogenomics, tumor profiling and prenatal testing sales are impressive. Within the Mental Health business, the company recorded strong volumes for its GeneSight Psychotropic test, instilling optimism. The gross margin expansion looks encouraging. The strategic partnerships with Intermountain Precision Genomics and Epic Systems Corporation are other advantages. Product Volume Rebounds: Myriad Genetics continues to record strong testing volumes from new products. Total test volumes in the second quarter were 260,000, reflecting a year-over-year rise of 9% and exhibiting continued growth in the company’s core business. Tumor profiling test volumes in Oncology for the quarter increased 7% year over year. Pharmacogenomics test volumes in Mental Health rose 39% year over year. Meanwhile, GeneSight volumes in the second quarter were 95,000, setting a record for the test's highest quarterly volumes. myChoiceCDx Progresses Well: Myriad Genetics' progress across the globe with respect to the myChoiceCDx test seems impressive. The company recorded strong revenue growth in the second quarter from companion diagnostics, including significant revenue share from its proprietary myChoiceCDx test. In the quarter under review, the myChoiceCDx saw its highest quarterly volume in the United States to date, up 63% year on year. On a sequential basis, myChoiceCDx quarterly volumes were up 10%. Downsides Sales Results Discouraging: Myriad Genetics registered a year-over-year decline in revenues in the second quarter. The top line was impacted by persistent foreign exchange headwinds, raising apprehension. Hereditary Cancer revenues fell 8% year over year, with quarterly volumes dropping 4%. Foreign Exchange Headwinds: Myriad Genetics receives a considerable portion of its revenues and pays a portion of its expenses in foreign currencies. As a result, the company remains at risk of unfavorable exchange rate fluctuations between foreign currencies and the U.S. dollar. Increasing Competition: Myriad Genetics is facing major competition in its key BRACAnalysis market. The company expects competition to intensify in its current fields with recently observed technological advancements. Other companies may also launch molecular diagnostic tests that may compete with Myriad Genetics’ testing products and services. Estimates
The Zacks Consensus Estimate for Myriad Genetics’ 2022 bottom line is pegged at a loss of 3 cents per share.
The Zacks Consensus Estimate for its 2022 revenues is pegged at $694.65 million, suggesting a 4.8% rise from the year-ago reported number.
A few better-ranked stocks in the broader medical space that investors can consider are
AMN Healthcare Services, Inc. ( AMN Quick Quote AMN - Free Report) , Patterson Companies, Inc. ( PDCO Quick Quote PDCO - Free Report) and McKesson Corporation ( MCK Quick Quote MCK - Free Report) .
AMN Healthcare has a long-term earnings growth rate of 3.2%. The company surpassed earnings estimates in the trailing four quarters, delivering a surprise of 15.7%, on average. It currently sports a Zacks Rank #1 (Strong Buy). You can see
the complete list of today’s Zacks #1 Rank stocks here.
AMN Healthcare has outperformed its industry in the past year. AMN has lost 5.6% against the industry’s 31.6% fall.
Patterson Companies has an estimated long-term growth rate of 7.9%. The company’s earnings surpassed estimates in all the trailing four quarters, the average beat being 16.5%. It currently carries a Zacks Rank #2 (Buy).
Patterson Companies has outperformed its industry in the past year. PDCO has lost 0.8% compared with the industry’s 7.6% fall in the past year.
McKesson has an estimated long-term growth rate of 9.9%. The company surpassed earnings estimates in the trailing three quarters and missed in one, delivering a surprise of 13%, on average. It currently carries a Zacks Rank #2.
McKesson has outperformed its industry in the past year. MCK has gained 82.5% against the industry’s 7.6% fall.