Why Is Myriad (MYGN) Up 3% Since Last Earnings Report?
A month has gone by since the last earnings report for Myriad Genetics (MYGN). Shares have added about 3% in that time frame, underperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Myriad due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Myriad Genetics Posts Narrower-Than-Estimate Loss in Q3
Myriad Genetics 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 revenues 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.
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.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates review.
The consensus estimate has shifted -103.64% due to these changes.
VGM Scores
Currently, Myriad has a strong Growth Score of A, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Myriad has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Myriad belongs to the Zacks Medical - Biomedical and Genetics industry. Another stock from the same industry, Sarepta Therapeutics (SRPT), has gained 6.3% over the past month. More than a month has passed since the company reported results for the quarter ended September 2023.
Sarepta Therapeutics reported revenues of $331.82 million in the last reported quarter, representing a year-over-year change of +44.1%. EPS of -$0.46 for the same period compares with -$2.94 a year ago.
For the current quarter, Sarepta Therapeutics is expected to post a loss of $0.40 per share, indicating a change of +67.7% from the year-ago quarter. The Zacks Consensus Estimate has changed +40.7% over the last 30 days.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #2 (Buy) for Sarepta Therapeutics. Also, the stock has a VGM Score of C.
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