What Happened?
Shares of genetic testing company Myriad Genetics (NASDAQ:MYGN) jumped 10.6% in the morning session after Piper Sandler analysts upgraded the stock's rating from Neutral to Buy. The improved outlook was based on expectations for MYGN's new CEO, Sam Raha, to "reset the business and provide reasonable expectations for investors."
After the initial pop the shares cooled down to $10.65, up 3.9% from previous close.
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What The Market Is Telling Us
Myriad Genetics’s shares are quite volatile and have had 18 moves greater than 5% over the last year. But moves this big are rare even for Myriad Genetics and indicate this news significantly impacted the market’s perception of the business.
The previous big move we wrote about was 15 days ago when the stock dropped 16.1% on the news that the company reported a tough quarter (Q4 2024), with revenue missing expectations and 2025 guidance for both revenue and EBITDA coming in light. While revenue did grow 7% compared to the previous year, thanks to strong gains in Pharmacogenomics (+14%y/y) and Prenatal testing (+12%y/y), it wasn't enough to make up for weakness in other areas, leading to the overall shortfall.
Despite the revenue miss, Myriad Genetics delivered a strong adjusted EBITDA, significantly outpacing analysts' expectations. The company benefited from improved gross margins, driven by higher revenue per test and operational efficiencies.
Looking ahead, the company provided 2025 revenue guidance of $850 million at the midpoint, which implied slower growth compared to 2024. Adjusted EBITDA guidance also fell short of expectations, raising concerns about profitability.
Adding to the challenges, UnitedHealthcare's decision to cut coverage for certain multi-gene pharmacogenetic tests in 2025 posed a headwind for the GeneSight business.
Overall, it wasn't a great quarter as revenue growth didn't meet expectations, guidance left investors uncertain, and upcoming reimbursement changes added further risk.
Myriad Genetics is down 21.1% since the beginning of the year, and at $10.65 per share, it is trading 62.8% below its 52-week high of $28.60 from September 2024. Investors who bought $1,000 worth of Myriad Genetics’s shares 5 years ago would now be looking at an investment worth $849.28.
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