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Here's Why You Should Retain Myriad Genetics (MYGN) Stock Now
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Myriad Genetics (MYGN - Free Report) is well poised for growth in the coming quarters, backed by strong improvement in testing volume across all its businesses. Strong solvency is an added advantage. Yet, foreign exchange headwinds and stiff competition are a concern.
In the past six months, this Zacks Rank #3 (Hold) stock has gained 32.8% compared with a 0.6% rise of the industry and a 20% rise of the S&P 500 composite.
The renowned genetic testing and precision medicine company has a market capitalization of $1.83 billion. Myriad Genetics surpassed estimates in three of the trailing four quarters and missed the same in one, delivering an average earnings surprise of 42.99%.
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 detect better, treat and prevent disease. In the fourth quarter of 2023, hereditary cancer testing volumes from the oncology business rose 7% year over year, reflecting enduring franchise and improving brand reputation. Prolaris — the prostate cancer test — continued its momentum, with fourth-quarter revenues rising 14% year over year.
During the fourth quarter, the company launched the Myriad Collaborative Research Registry (MCRR), which includes data across germline and tumor testing results from Myriad Genetics' cancer products on more than one million patients.
Upbeat Guidance: Myriad Genetics raised its 2024 revenue guidance and introduced earnings per share (EPS) guidance. The company raised its revenue guidance, which is expected in the range of $820-$840 million. The projection suggests 9-11% growth over 2023 revenues (the previous guidance was $815-$835 million).
Adjusted EPS are expected in the range of break-even to 5 cents.
Strong Solvency With Slight Leverage: Myriad Genetics exited 2023 with cash and cash equivalents of $132.1 million compared with $56.9 million at the end of 2022. At the end of 2023, the long-term debt was $38.5 million compared with no debt at the end of 2022. This is a positive in terms of the solvency level as, at least during the year of the economic downturn, the company is holding 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, the translation of these foreign currency-denominated transactions will result in lower revenues, operating expenses and net income. Management is apprehensive that increased revenues may not significantly outweigh this.
Image Source: Zacks Investment Research
Increasing Competition: With the entry of new players, imminent price competition is another cause of concern. Per management, Myriad Genetics is currently facing competition in its key BRACAnalysis market. The company expects competition to intensify in its current fields with recently observed advancements in technology. Further, Myriad Genetics anticipates that other companies may also launch their molecular diagnostic tests, which may compete with its testing products and services.
Estimate Trend
The Zacks Consensus Estimate for MYGN’s 2024 EPS has remained constant at 2 cents in the past 90 days.
The Zacks Consensus Estimate for the company’s 2024 revenues is pegged at $827.7 million. The projection suggests a 9.9% rise from the year-ago reported number.
Key Picks
Some better-ranked stocks from the broader medical space are Stryker Corporation (SYK - Free Report) , Cencora, Inc. (COR - Free Report) and Cardinal Health (CAH - Free Report) .
Stryker, carrying a Zacks Rank #2 (Buy), reported a fourth-quarter 2023 adjusted EPS of $3.46, beating the Zacks Consensus Estimate by 5.8%. Revenues of $5.8 billion outpaced the consensus estimate by 3.8%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Stryker has an estimated earnings growth rate of 11.5% for 2025 compared with the S&P 500’s 9.9%. The company’s earnings surpassed estimates in each of the trailing four quarters, the average being 5.1%.
Cencora, carrying a Zacks Rank #2, reported a first-quarter fiscal 2024 adjusted EPS of $3.28, which beat the Zacks Consensus Estimate by 14.7%. Revenues of $72.3 billion outpaced the Zacks Consensus Estimate by 5.1%.
COR has an earnings yield of 5.75% compared with the industry’s 1.85%. The company’s earnings surpassed estimates in each of the trailing four quarters, the average being 6.7%.
Cardinal Health, carrying a Zacks Rank #2, reported second-quarter fiscal 2024 adjusted earnings of $1.82, which beat the Zacks Consensus Estimate by 16.7%. Revenues of $57.45 billion improved 11.6% on a year-over-year basis and also topped the Zacks Consensus Estimate by 1.1%.
CAH has a long-term estimated earnings growth rate of 15.3% compared with the industry’s 11.8% growth. The company’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 15.6%.
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Here's Why You Should Retain Myriad Genetics (MYGN) Stock Now
Myriad Genetics (MYGN - Free Report) is well poised for growth in the coming quarters, backed by strong improvement in testing volume across all its businesses. Strong solvency is an added advantage. Yet, foreign exchange headwinds and stiff competition are a concern.
In the past six months, this Zacks Rank #3 (Hold) stock has gained 32.8% compared with a 0.6% rise of the industry and a 20% rise of the S&P 500 composite.
The renowned genetic testing and precision medicine company has a market capitalization of $1.83 billion. Myriad Genetics surpassed estimates in three of the trailing four quarters and missed the same in one, delivering an average earnings surprise of 42.99%.
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 detect better, treat and prevent disease. In the fourth quarter of 2023, hereditary cancer testing volumes from the oncology business rose 7% year over year, reflecting enduring franchise and improving brand reputation. Prolaris — the prostate cancer test — continued its momentum, with fourth-quarter revenues rising 14% year over year.
During the fourth quarter, the company launched the Myriad Collaborative Research Registry (MCRR), which includes data across germline and tumor testing results from Myriad Genetics' cancer products on more than one million patients.
Upbeat Guidance: Myriad Genetics raised its 2024 revenue guidance and introduced earnings per share (EPS) guidance. The company raised its revenue guidance, which is expected in the range of $820-$840 million. The projection suggests 9-11% growth over 2023 revenues (the previous guidance was $815-$835 million).
Adjusted EPS are expected in the range of break-even to 5 cents.
Strong Solvency With Slight Leverage: Myriad Genetics exited 2023 with cash and cash equivalents of $132.1 million compared with $56.9 million at the end of 2022. At the end of 2023, the long-term debt was $38.5 million compared with no debt at the end of 2022. This is a positive in terms of the solvency level as, at least during the year of the economic downturn, the company is holding 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, the translation of these foreign currency-denominated transactions will result in lower revenues, operating expenses and net income. Management is apprehensive that increased revenues may not significantly outweigh this.
Increasing Competition: With the entry of new players, imminent price competition is another cause of concern. Per management, Myriad Genetics is currently facing competition in its key BRACAnalysis market. The company expects competition to intensify in its current fields with recently observed advancements in technology. Further, Myriad Genetics anticipates that other companies may also launch their molecular diagnostic tests, which may compete with its testing products and services.
Estimate Trend
The Zacks Consensus Estimate for MYGN’s 2024 EPS has remained constant at 2 cents in the past 90 days.
The Zacks Consensus Estimate for the company’s 2024 revenues is pegged at $827.7 million. The projection suggests a 9.9% rise from the year-ago reported number.
Key Picks
Some better-ranked stocks from the broader medical space are Stryker Corporation (SYK - Free Report) , Cencora, Inc. (COR - Free Report) and Cardinal Health (CAH - Free Report) .
Stryker, carrying a Zacks Rank #2 (Buy), reported a fourth-quarter 2023 adjusted EPS of $3.46, beating the Zacks Consensus Estimate by 5.8%. Revenues of $5.8 billion outpaced the consensus estimate by 3.8%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Stryker has an estimated earnings growth rate of 11.5% for 2025 compared with the S&P 500’s 9.9%. The company’s earnings surpassed estimates in each of the trailing four quarters, the average being 5.1%.
Cencora, carrying a Zacks Rank #2, reported a first-quarter fiscal 2024 adjusted EPS of $3.28, which beat the Zacks Consensus Estimate by 14.7%. Revenues of $72.3 billion outpaced the Zacks Consensus Estimate by 5.1%.
COR has an earnings yield of 5.75% compared with the industry’s 1.85%. The company’s earnings surpassed estimates in each of the trailing four quarters, the average being 6.7%.
Cardinal Health, carrying a Zacks Rank #2, reported second-quarter fiscal 2024 adjusted earnings of $1.82, which beat the Zacks Consensus Estimate by 16.7%. Revenues of $57.45 billion improved 11.6% on a year-over-year basis and also topped the Zacks Consensus Estimate by 1.1%.
CAH has a long-term estimated earnings growth rate of 15.3% compared with the industry’s 11.8% growth. The company’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 15.6%.