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Myriad (MYGN) Down 4.8% Since Last Earnings Report: Can It Rebound?

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A month has gone by since the last earnings report for Myriad Genetics (MYGN - Free Report) . Shares have lost about 4.8% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Myriad due for a breakout? 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 Q2 Earnings and Revenues Surpass Estimates

Myriad Genetics, Inc. reported adjusted earnings of 5 cents per share in the second quarter of 2024 compared to the Zacks Consensus Estimate of a loss of 1 cent per share. The reported figure also compares to a loss of 8 cents per share in the year-ago quarter.

The quarter’s adjustments exclude amortization expenses from acquired intangible assets, equity compensations and real estate optimization, among others.

Revenues

Total revenues rose 15.3% year over year to $211.5 million in the quarter under review. The figure topped the Zacks Consensus Estimate by 2.9%. Testing volumes increased 9% year over year.

Quarter in Detail

Hereditary Cancer testing revenues rose 19% year over year to $91.5 million.

Pharmacogenomics testing revenues were $43 million, up 22% year over year.

Tumor Profiling testing revenues fell 9% year over year to $32.6 million.

Prenatal testing revenues came in at $44.4 million, up 25% year over year.

Margin Trends

The gross margin in the quarter under review expanded 105 basis points (bps) to 69.6%.

Research and development expenses rose 27.8% year over year to $27.1 million. SG&A expenses increased 3% to $144.9 million in the reported quarter.

The adjusted operating loss was $24.9 million compared with $36.2 million in the year-ago quarter.

Financial Position

Myriad Genetics exited the second quarter of 2024 with cash and cash equivalents of $92.4 million compared with $96.9 million at the end of the first quarter.

Long-term debt was $38.8 million compared with $38.7 million at the end of the first quarter.

The cumulative net cash used in operating activities at the end of the reported quarter was $16 million compared with the $34.1 million cash outflow in the year-ago period.

2024 Guidance

Myriad Genetics provided an updated 2024 outlook.

The company expects its revenues in the range of $835-$845 million (earlier $820-$840 million), suggesting 11-12% (previously 9) growth over 2023 revenues. The Zacks Consensus Estimate for the same is pegged at $834.2 million.

Adjusted earnings per share are expected in the range of 8 cents-12 cents (previously flat to 5 cents). The Zacks Consensus Estimate for the same is pegged at 3 cents.

Meanwhile, the company also raised its long-term revenue growth target to 12%.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed an upward trend in estimates revision.

The consensus estimate has shifted 16.67% due to these changes.

VGM Scores

At this time, Myriad has a strong Growth Score of A, a grade with the same score on the momentum front. However, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.

Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. 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, Denali Therapeutics Inc. (DNLI - Free Report) , has gained 16.1% over the past month. More than a month has passed since the company reported results for the quarter ended June 2024.

Denali Therapeutics reported revenues of $0 million in the last reported quarter, representing a year-over-year change of -100%. EPS of -$0.59 for the same period compares with $1.30 a year ago.

For the current quarter, Denali Therapeutics is expected to post a loss of $0.61 per share, indicating a change of +15.3% from the year-ago quarter. The Zacks Consensus Estimate has changed +1.3% over the last 30 days.

The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for Denali Therapeutics. Also, the stock has a VGM Score of F.


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