On Jul 3, we issued an updated research report on Myriad Genetics, Inc. MYGN. The company is making significant progress in its portfolio expansion. Emerging competitors and pricing pressure might prove detrimental to Myriad’s stock in the near future. The stock carries a Zacks Rank #3 (Hold), at present.
Myriad Genetics’ fiscal revenues registered robust performance in the first two months of the third quarter. EndoPredict testing boosted the top line and FDA approvals for myChoice CDx and BRACAnalysis CDx bode well. Potential in hereditary cancer testing instills optimism. Further, a strong solvency with slight leverage looks encouraging.
The company recorded mid-single digit growth in Hereditary Cancer test volumes on a year-over-year basis till the implementation of social distancing policies in March to fight the coronavirus outbreak.
Myriad Genetics, Inc. Price
Myriad Genetics, Inc. price | Myriad Genetics, Inc. Quote
Going ahead, Myriad Genetics expects to register an uptick in hereditary cancer volumes on account of its contract with UnitedHealthcare. The company’s myPath Melanoma, which is in preliminary stages of commercialization, has completed the first phase of the expanded launch and is being promoted to approximately 35% of the targeted market.
On the flip side, the company saw a decline in both operating segments owing to the coronavirus pandemic since mid-March. Within Molecular Diagnostics, the majority of its tests segments witnessed a year-over-year revenue loss. The company experienced gross margin contraction due to escalation in costs and expenses and incurred operating loss during the quarter as well. Further, withdrawal of its full-year guidance is concerning.
Meanwhile, Myriad Genetics faces acute competition in the key BRACAnalysis market. The company expects the same to intensify with newer advancements of this technology. We believe tough headwinds might reduce the prices of expensive tests provided by the company. This might, in turn, impede the company’s margin improvement.
Some better-ranked stocks from the broader medical space are Quest Diagnostics Incorporated DGX, Laboratory Corporation of America Holdings LH and Hologic, Inc. HOLX.
Quest Diagnostics’ long-term earnings growth rate is projected at 7.6%. It currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
LabCorp’s long-term earnings growth rate is estimated at 6.1%. The company presently has a Zacks Rank #2 (Buy).
Hologic’s long-term earnings growth rate is estimated at 7%. The company presently has a Zacks Rank #2.
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