Here's Why You Should Retain Myriad Genetics (MYGN) Stock Now
Myriad Genetics MYGN is well poised for growth in coming quarters, backed by a 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 year, this Zacks Rank #3 (Hold) stock has gained 13.4% compared with a 8.6% fall of the industry and a 27.3% rise of the S&P 500 composite.
The renowned genetic testing and precision medicine company has a market capitalization of $1.63 billion. Myriad Genetics surpassed estimates in three of the trailing four quarters and missed the same in one, delivering an average earnings surprise of 24.24%.
Let’s delve deeper.
Tailwinds
Huge Potential in Oncology Testing: The company is positioned to cash on the vast potential in the breast cancer screening market. Per a report by Grand View Research on Medium, the breast cancer screening market in the United States is expected to reach a value of nearly $6.8 billion by 2028.
In the third quarter of 2023, hereditary cancer testing volumes from the oncology business rose 15% year over year, well above the estimated industry growth. This reflects on the strength of franchises and improvement in brand reputation. Prolaris — the prostate cancer test — continued its momentum, with third-quarter revenues rising 18% year over year.
myChoiceCDx Progresses Well: Myriad Genetics' progress across the globe with respect to myChoiceCDx test seems impressive. The company continues to record strong revenue growth from companion diagnostics, including significant revenue share from its proprietary myChoiceCDx test.
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In September 2023, Myriad Genetics announced two key milestones in its strategic partnership with Illumina. The collaboration brings together Myriad’s MyChoice CDx homologous recombination deficiency (HRD) technology and Illumina’s expertise in comprehensive genomic profiling to broaden clinical research opportunities and drive CDx development for gene-based therapies.
Strong Solvency With Slight Leverage: Myriad Genetics exited the third quarter of 2023 with cash and cash equivalents of $76 million compared with $56.9 million at the end of the second quarter of 2023. At the end of the third quarter, the long-term debt was $38.5 million compared with $38.4 million in the second quarter. 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 is at risk of exchange rate fluctuations between foreign currencies and the U.S. dollar.
Increasing Competition: With the entry of new players, imminent price competition is a 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.
Estimate Trend
The Zacks Consensus Estimate for MYGN’s 2023 loss per share has moved up from 31 cents to 30 cents in the past 90 days.
The Zacks Consensus Estimate for the company’s 2023 revenues is pegged at $750.9 million. The projection suggests a 10.7% rise from the year-ago reported number.
Key Picks
Some better-ranked stocks in the broader medical space are DaVita Inc. DVA, HealthEquity, Inc. HQY and Integer Holdings Corporation ITGR.
DaVita, sporting a Zacks Rank #1 (Strong Buy), has an estimated long-term growth rate of 17.3%. DVA’s earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 36.6%. You can see the complete list of today’s Zacks #1 Rank stocks here.
DaVita’s shares have gained 38.2% compared with the industry’s 9.4% rise in the past year.
HealthEquity, carrying a Zacks Rank of 2 at present, has an estimated long-term growth rate of 27.5%. HQY’s earnings surpassed estimates in each of the trailing four quarters, with the average being 16.5%.
HealthEquity has gained 8.2% against the industry’s 6.3% decline in the past year.
Integer Holdings, carrying a Zacks Rank of 2 at present, has an estimated long-term growth rate of 15.8%. ITGR’s earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 11.9%.
Integer Holdings’ shares have rallied 44.9% compared with the industry’s 3.7% rise in the past year.
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DaVita Inc. (DVA) : Free Stock Analysis Report
Myriad Genetics, Inc. (MYGN) : Free Stock Analysis Report
HealthEquity, Inc. (HQY) : Free Stock Analysis Report
Integer Holdings Corporation (ITGR) : Free Stock Analysis Report
