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Myriad Genetics (MYGN) Q4 Earnings Top Estimate, Margins Down

Myriad Genetics, Inc. MYGN reported an adjusted earnings per share (EPS) of 4 cents per share in the fourth quarter of 2023 versus the year-ago quarter’s loss of 12 cents. The metric surpassed the Zacks Consensus Estimate of 2 cents by 100%.

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

The GAAP loss was 36 cents compared with the prior-year quarter’s loss of 52 cents.

For the full year, the adjusted loss was 27 cents per share compared with the year-ago period’s loss of 30 cents. The metric was narrower than the Zacks Consensus Estimate of a loss of 30 cents.

Revenues

Total revenues rose 10.6% year over year to $196.6 million in the quarter under review. The figure topped the Zacks Consensus Estimate by 1.2%.

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Testing volumes rose 35% year over year, excluding contributions from the SneakPeek Early Gender DNA Test.

Total revenues for 2023 were $753 million, reflecting an 11% rise from the year-ago period. The figure topped the Zacks Consensus Estimate by 0.3%.

Quarter in Detail

Hereditary Cancer testing revenues rose 5% year over year to $88.9 million.

Pharmacogenomics testing revenues were $35.6 million, up 11% year over year.

Tumor Profiling testing revenues were up 1% year over year to $32.1 million.

Prenatal testing revenues came in at $40 million, up 37% year over year.

Margin Trends

The gross margin in the quarter under review contracted 102 basis points (bps) to 68.7%.

Research and development expenses fell 10.3% year over year to $21 million. SG&A expenses fell 0.8% to $145.4 million in the reported quarter.

Myriad Genetics, Inc. Price, Consensus and EPS Surprise

 

Myriad Genetics, Inc. Price, Consensus and EPS Surprise
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 $31.4 million compared with the adjusted operating loss of $46 million in the year-ago quarter.

Financial Position

Myriad Genetics exited 2023 with cash and cash equivalents of $132.1 million compared with $56.9 million at the end of 2022. At the end of 2023, the long-term debt was $38.5 million compared with no debt at the end of 2022.

The cumulative net cash used in operating activities at the end of 2023 was $110.9 million compared with the year-ago cumulative net operating cash outflow of $106.3 million.

2024 Guidance

Myriad Genetics raised its 2024 revenue guidance and introduced EPS guidance.

The company raised its revenue guidance, which is now expected in the range of $820-$840 million, suggesting a 9-11% growth over 2023 revenue (the previous guidance was $815-$835 million). The Zacks Consensus Estimate for the same is pegged at $820.5 million.

Adjusted EPS is expected to be in the range of break-even to 5 cents. The Zacks Consensus Estimate for the same is pegged at 1 cent.

Our Take

Myriad Genetics exited the fourth quarter of 2023 with better-than-expected earnings and revenues. The company witnessed a strong testing volume improvement across all its businesses, with the prenatal testing franchise registering a 37% year-over-year increase.

In the fourth quarter, Myriad Genetics added approximately 4,000 clinicians who ordered GeneSight for the first time. The launch of the Myriad Collaborative Research Registry (MCRR), which includes data across germline and tumor testing results from Myriad Genetics' cancer products on more than one million patients, looks encouraging. Further, the raised 2024 revenue guidance instills optimism in the stock.

However, the contraction of gross margin due to changes in product and volume mix looks discouraging. Foreign exchange headwinds and stiff competition remain a concern.

Zacks Rank and Key Picks

Myriad Genetics currently carries Zacks Rank #3 (Hold).

Some better-ranked stocks from the broader medical space are Stryker Corporation SYK, Cencora, Inc. COR and Cardinal Health CAH.

Stryker, carrying a Zacks Rank #2 (Buy), reported an adjusted EPS of $3.46 in fourth-quarter 2023, beating the Zacks Consensus Estimate by 5.8%. Revenues of $5.8 billion outpaced the consensus estimate by 3.8%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Stryker has an estimated earnings growth rate of 11.5% for 2025 compared with the S&P 500’s 9.9%. The company’s earnings surpassed estimates in each of the trailing four quarters, the average being 5.1%.

Cencora, carrying a Zacks Rank #2, reported an adjusted EPS of $3.28 in first-quarter fiscal 2024, beating the Zacks Consensus Estimate by 14.7%. Revenues of $72.3 billion outpaced the Zacks Consensus Estimate by 5.1%.

COR has an earnings yield of 5.75% compared with the industry’s 1.85%. The company’s earnings surpassed estimates in each of the trailing four quarters, the average being 6.7%.

Cardinal Health reported second-quarter fiscal 2024 adjusted earnings of $1.82, which beat the Zacks Consensus Estimate by 16.7%. Revenues of $57.45 billion improved 11.6% on a year-over-year basis and also topped the Zacks Consensus Estimate by 1.1%.

CAH has a long-term estimated earnings growth rate of 15.3% compared with the industry’s 11.8% growth. The company’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 15.6%.

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