Myriad Genetics (MYGN) Posts Narrower-Than-Estimate Loss in Q3
Myriad Genetics, Inc. MYGN reported an adjusted loss of 3 cents per share in the third quarter of 2023 compared with the year-ago quarter’s loss of 19 cents. The metric was narrower than the Zacks Consensus Estimate of a loss of 8 cents.
The quarter’s adjustments exclude amortization expenses from acquired intangible assets, transitory costs related to transformation initiatives and equity compensations.
The GAAP loss was 75 cents compared with the prior-year quarter’s loss of 43 cents.
Revenues
Total revenues rose 22.7% year over year to $191.9 million in the quarter under review. The figure topped the Zacks Consensus Estimate by 6.3%.
Testing volumes rose 18% year over year, excluding contributions from the SneakPeek Early Gender DNA Test.
Quarter in Detail
Hereditary Cancer testing revenues rose 23% year over year to $86.5 million.
Pharmacogenomics testing revenue es were $35.7 million, up 8% year over year.
Tumor Profiling testing revenues were down 2% year over year to $30.2 million.
Prenatal testing revenues came in at $39.5 million, up 79% year over year.
Margin Trends
The gross margin in the quarter under review expanded 221 basis points (bps) to 70%.
Research and development expenses rose 17.1% year over year to $24 million. SG&A expenses increased 4.3% to $136.1 million in the reported quarter.
Myriad Genetics, Inc. Price, Consensus and EPS Surprise
Myriad Genetics, Inc. price-consensus-eps-surprise-chart | Myriad Genetics, Inc. Quote
The adjusted operating loss in the quarter was $25.8 million compared with the adjusted operating loss of $45 million in the year-ago quarter.
Financial Position
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.
The cumulative net cash used in operating activities at the end of the third quarter was $56.2 million compared with the year-ago cumulative net operating cash outflow of $99 million.
2023 Guidance
Myriad Genetics updated its full-year 2023 guidance.
For 2023, the company now expects revenues in the range of $747 -$753 million (up from the earlier guidance of $730-$750 million). This indicates the projected annual growth of 10-11% over 2022. The Zacks Consensus Estimate for the same is pegged at $739.5 million.
The adjusted earnings per share (EPS) is expected to be in the range of a loss of 33-28 cents (the previous guidance was 36-24 cents). The Zacks Consensus Estimate for the metric is pegged at a loss of 31 cents per share.
2024 Guidance
Myriad Genetics introduces its 2024 revenue guidance, which is expected in the range of $815-$835 million (suggesting a 9-11% growth over the mid-point of the 2023 revenue guidance). The Zacks Consensus Estimate for the same is pegged at $803.1 million.
Our Take
Myriad Genetics exited the third quarter of 2023 with better-than-expected earnings and revenues. The company witnessed a strong testing volume improvement across all its businesses, with the Hereditary cancer testing franchise registering a 23% year-over-year increase — the fifth consecutive quarter of double-digit growth year over year.
In the third quarter, Myriad Genetics added approximately 4,000 clinicians who ordered GeneSight for the first time. In collaboration with Onsite Women’s Health, a leading national provider of breast health services, Myriad Genetics announced the launch of a new breast cancer risk assessment program to help more women understand their breast cancer risk. Expansion of gross margin is encouraging, too. The raised 2023 revenue guidance raises optimism.
The company registered operating loss due to mounting costs and expenses. Foreign exchange headwinds and stiff competition remain a concern.
Zacks Rank and Key Picks
Myriad Genetics currently carries Zacks Rank #4 (Sell).
Some better-ranked stocks in the broader medical space that have announced quarterly results are Abbott Laboratories ABT, Inari Medical NARI and Integer Holdings Corporation ITGR.
Abbott, carrying a Zacks Rank of 2 (Buy), reported adjusted EPS of $1.14 in third-quarter 2023, beating the Zacks Consensus Estimate by 3.6%. Revenues of $10.14 billion outpaced the consensus mark by 3.6%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Abbott has a long-term estimated growth rate of 5.1%. ABT’s earnings surpassed estimates in all the trailing four quarters, the average surprise being 6.8%.
Inari Medical, carrying a Zacks Rank #2, reported adjusted EPS of 4 cents in third-quarter 2023, beating the Zacks Consensus Estimate by a staggering 128.6%. Revenues of $119 million outpaced the consensus estimate by 2.3%.
Inari Medical has an estimated earnings growth rate of 725% for the following year. Inari Medical’s earnings surpassed estimates in all the trailing four quarters, the average being 66.8%.
Integer Holdings reported a third-quarter 2023 adjusted EPS of $1.27, beating the Zacks Consensus Estimate by 20.9%. Revenues of $404.7 million surpassed the Zacks Consensus Estimate by 8.7%. It currently carries a Zacks Rank #2.
Integer Holdings has a long-term estimated growth rate of 15.8%. ITGR’s earnings surpassed estimates in all the trailing four quarters, the average surprise being 11.9%.
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