A month has gone by since the last earnings report for Myriad Genetics (MYGN - Free Report) . Shares have added about 5.9% in that time frame, outperforming 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 catalysts.
Myriad Genetics Q4 Earnings Lag Estimates, Revenues Up
Myriad Geneticsreported adjusted earnings per share (EPS) of 41 cents in the fourth quarter of fiscal 2019, down 4.7% (5%) year over year. Adjusted EPS also lagged the Zacks Consensus Estimate by 12.8%.
On a reported basis, loss per share was 6 cents, showing a sharp decline from the year-ago earnings of 20 cents a share.
For the full year, adjusted EPS came in at $1.67, representing a 17.6% rise from the year-earlier period. However, the number lagged the Zacks Consensus Estimate by 4%.
Total revenues were up 11.1% year over year to $215.4 million in the quarter under review. The figure, however, missed the Zacks Consensus Estimate by 2.9%.
Fiscal year 2019 revenues of $851.1 million increased from $743.7 million (up 14.4%). However, revenues fell short of the consensus estimate of $857.33 million by 0.7%.
Quarter in Detail
Segment-wise, Molecular diagnostic tests recorded total revenues of $196.9 million, up 9% year over year.
Within this segment, Hereditary Cancer testing revenues remained marginally flat year over year, at $ 119.1 million. EndoPredict testing revenues increased 11.1% year over year to $3 million in the quarter under review. Vectra testing revenues were $12.2 million, down 19.2% year over year while other testing revenues declined 40.7% to $1.6 million. Further, GeneSight testing revenues fell 12.4% year over year to $29.8 million in the reported quarter. Prolaris tests raked in revenues of $6.3 million, down 10% year over year. Prenatal testing revenues came in at $25 million.
Pharmaceutical and clinical service revenues in the quarter under review totaled $18.5 million, reflecting a year-over-year increase of 39.1%.
Gross margin in the quarter under review expanded 8 basis points (bps) to 76.5%. Research and development (R&D) expenses rose 18.1% year over year (to $20.9 million) along with a 33.2% increase in selling, general and administrative (SG&A) expenses (to $149.8 million) in the reported quarter. Adjusted operating loss was $6 million, reflecting a sharp contraction from the year-ago adjusted operating profit of $18 million.
Myriad Genetics exited fiscal 2019 with cash, cash equivalents and marketable securities of $136.9 million compared with $180.6 million at the end of the preceding year. For the full year, net cash provided by operating activities came in at $83.7 million compared with $115.9 million a year-ago (a 27.8% decline).
Myriad Genetics has issued the guidance for fiscal 2020 revenues. The company expects fiscal 2020 revenues within $865-$875 million. The Zacks Consensus Estimate for the metric is pegged at $922.9 million, higher than the projection.
On the bottom-line front, the company expects adjusted EPS in the band of $1.80-$1.90. The current consensus estimate for the metric is $1.93, which lies above the current projection.
Management has also provided the guidance for the first quarter of fiscal 2020. The company estimates adjusted EPS in the range of 30-32 cents and total revenues of $200-$202 million. The Zacks Consensus Estimate for adjusted EPS stands at 43 cents, above the company’s guided figure. Our consensus estimate for revenues is $219.9 million, below the company’s guided figure.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates revision. The consensus estimate has shifted -29.86% due to these changes.
At this time, Myriad has an average Growth Score of C, though it is lagging a bit on the Momentum Score front with a D. Charting a somewhat similar path, 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 D. If you aren't focused on one strategy, this score is the one you should be interested in.
Estimates have been broadly trending downward for the stock, and the magnitude of this revision indicates a downward shift. It's no surprise Myriad has a Zacks Rank #5 (Strong Sell). We expect a below average return from the stock in the next few months.