Myriad Genetics ( MYGN Quick Quote MYGN - Free Report) is well poised for growth in coming quarters, backed by a substantial improvement in testing volume across all its businesses. The GeneSight test continued to achieve a solid uptick within the Mental Health segment. However, Foreign exchange headwinds and stiff competition remain a concern.
In the past year, this Zacks Rank #3 (Hold) stock have declined 30.1% against the 12.7% fall of the
industry and a 9.5% rise of the S&P 500 composite.
The renowned genetic testing and precision medicine company has a market capitalization of $1.34 billion. The company has estimated earnings growth of 90.6% compared with the S&P 500’s 10.7%. Myriad Genetics surpassed estimates in two of the trailing four quarters and missed the same in the other two, delivering an average negative earnings surprise of 85.13%.
Let’s delve deeper.
Tailwinds Huge Potential in Oncology Testing: As a leader in genetic testing and precision medicine, Myriad Genetics provides insights that help people take control of their health and enable healthcare providers to better detect, treat and prevent disease. The company believes that the key opportunities to grow its Oncology business are the expansion of companion diagnostics, market expansion through new clinical guidelines and providing new offerings.
In the second quarter, Myriad Genetics’ Oncology business generated $80.7 million in revenues. Reported test volumes were approximately 52,000. Prolaris continued to see strong demand as second-quarter testing volumes increased 22% year over year. Hereditary cancer testing volume in oncology grew 13% in the quarter year over year.
Product Launches: Myriad Genetics launched a slew of products in recent months. In August 2023, Myriad Genetics announced enhancements to the GeneSight Psychotropic test — a pharmacogenomic test for mental health medications. Image Source: Zacks Investment Research
The same month, Myriad Genetics announced the integration of Absolute Risk Reduction (ARR) into the Prolaris Prostate Cancer Prognostic Test to help patients and providers make personalized treatment decisions regarding hormone therapy.
Strong Solvency With Slight Leverage: Myriad Genetics exited the second quarter of 2023 with cash and cash equivalents of $102.8 million compared with $53.6 million at the end of the first quarter of 2023. At the end of the second quarter, the long-term debt was $38.4 million, while the company had no obligation in the first quarter. This is a positive in terms of the solvency level as, at least during the year of the economic downturn, the company holds sufficient cash for debt repayment. Downsides 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 exchange rate fluctuations between foreign currencies and the U.S. dollar. If the dollar strengthens against foreign currencies, translating these foreign currency-denominated transactions will result in decreased revenues, operating expenses and net income. Management fears this may not be significantly outweighed by increased revenues. Increasing Competition: With the entry of new players, imminent price competition is another cause of concern. Per management, Myriad Genetics faces competition in its key BRACAnalysis market. The company expects competition to intensify with recently-observed technological advancements in its current fields. Estimate Trend
The Zacks Consensus Estimate for MYGN’s 2023 loss per share has remained constant at 32 cents in the past 30 days.
The Zacks Consensus Estimate for the company’s 2023 revenues is pegged at $739.6 million. This suggests a 9% rise from the year-ago reported number.
Some better-ranked stocks in the broader medical space are
Haemonetics ( HAE Quick Quote HAE - Free Report) , Quanterix ( QTRX Quick Quote QTRX - Free Report) and SiBone ( SIBN Quick Quote SIBN - Free Report) . You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. Haemonetics’ stock has risen 19.9% in the past year. Earnings estimates for Haemonetics have increased from $3.56 to $3.74 in 2023 and $3.96 to $4.07 in 2024 in the past 30 days. It currently carries Zacks Rank #2 (Buy). HAE’s earnings beat estimates in each of the trailing four quarters, delivering an average surprise of 19.39%. In the last reported quarter, it posted an earnings surprise of 38.16% Estimates for Quanterix’s 2023 loss per share have narrowed from $1.19 to 97 cents in the past 30 days. Shares of the company have increased 167.5% in the past year against the industry’s decline of 1.7%. It currently carries Zacks Rank #2. QTRX’s earnings beat estimates in each of the trailing four quarters, delivering an average surprise of 30.39%. In the last reported quarter, it posted an earnings surprise of 55.56%. Estimates for SiBone’s2023 loss have narrowed from $1.42 to $1.27 per share in the past 30 days. Shares of the company have increased 31% in the past year compared with the industry’s rise of 1.9%. It currently carries Zacks Rank #2.
SIBN’s earnings beat estimates in all the trailing four quarters, the average surprise being 20.37%. In the last reported quarter, SiBone delivered an earnings surprise of 26.83%.