Myriad Genetics (MYGN)

Genetic testing company Myriad Genetics (NASDAQ:MYGN) met Wall Streets revenue expectations in Q3 CY2025, but sales fell by 3.6% year on year to $205.7 million. The company’s outlook for the full year was close to analysts’ estimates with revenue guided to $823 million at the midpoint. Its non-GAAP loss of $0 per share was $0.01 above analysts’ consensus estimates.

Company Overview

Founded in 1991 as one of the pioneers in translating genetic discoveries into clinical applications, Myriad Genetics (NASDAQ:MYGN) develops genetic tests that assess disease risk, guide treatment decisions, and provide insights across oncology, women's health, and mental health.

Over the next few years, therapeutic companies, which develop a wide variety of treatments for diseases and disorders, face strong tailwinds from advancements in precision medicine (including the use of AI to improve hit rates) and growing demand for treatments targeting rare diseases. However, headwinds such as rising scrutiny over drug pricing, regulatory unknowns, and competition from larger, more resourced pharmaceutical companies could weigh on growth.

Myriad Genetics competes with several companies across its business segments, including Invitae Corporation, Natera, Inc., Ambry Genetics, Laboratory Corporation of America (LabCorp), and Quest Diagnostics in oncology and women's health testing. In pharmacogenomics, competitors include Genomind, Tempus, and other specialized genetic testing providers.

Larger companies benefit from economies of scale, where fixed costs like infrastructure, technology, and administration are spread over a higher volume of goods or services, reducing the cost per unit. Scale can also lead to bargaining power with suppliers, greater brand recognition, and more investment firepower. A virtuous cycle can ensue if a scaled company plays its cards right.

With just $825.3 million in revenue over the past 12 months, Myriad Genetics is a small company in an industry where scale matters. This makes it difficult to build trust with customers because healthcare is heavily regulated, complex, and resource-intensive.

Examining a company’s long-term performance can provide clues about its quality. Even a bad business can shine for one or two quarters, but a top-tier one grows for years. Unfortunately, Myriad Genetics’s 6.7% annualized revenue growth over the last five years was mediocre. This fell short of our benchmark for the healthcare sector and is a rough starting point for our analysis.

Long-term growth is the most important, but within healthcare, a half-decade historical view may miss new innovations or demand cycles. Myriad Genetics’s annualized revenue growth of 6% over the last two years aligns with its five-year trend, suggesting its demand was consistently weak.

This quarter, Myriad Genetics reported a rather uninspiring 3.6% year-on-year revenue decline to $205.7 million of revenue, in line with Wall Street’s estimates.

Looking ahead, sell-side analysts expect revenue to grow 3.6% over the next 12 months, a slight deceleration versus the last two years. This projection is underwhelming and implies its products and services will face some demand challenges.

Myriad Genetics was roughly breakeven when averaging the last five years of quarterly operating profits, lousy for a healthcare business.

On the plus side, Myriad Genetics’s adjusted operating margin rose by 1.9 percentage points over the last five years, as its sales growth gave it operating leverage. This performance was mostly driven by its recent improvements as the company’s margin has increased by 7.7 percentage points on a two-year basis.

In Q3, Myriad Genetics generated an adjusted operating margin profit margin of 2%, down 2.5 percentage points year on year. This contraction shows it was less efficient because its expenses increased relative to its revenue.

We track the long-term change in earnings per share (EPS) for the same reason as long-term revenue growth. Compared to revenue, however, EPS highlights whether a company’s growth is profitable.

Myriad Genetics’s full-year EPS flipped from negative to positive over the last five years. This is encouraging and shows it’s at a critical moment in its life.

In Q3, Myriad Genetics reported adjusted EPS of $0, down from $0.06 in the same quarter last year. Despite falling year on year, this print easily cleared analysts’ estimates. Over the next 12 months, Wall Street expects Myriad Genetics’s full-year EPS of $0.05 to grow 34.2%.

Free cash flow isn't a prominently featured metric in company financials and earnings releases, but we think it's telling because it accounts for all operating and capital expenses, making it tough to manipulate. Cash is king.

While Myriad Genetics posted positive free cash flow this quarter, the broader story hasn’t been so clean. Myriad Genetics’s demanding reinvestments have consumed many resources over the last five years, contributing to an average free cash flow margin of negative 10.6%. This means it lit $10.64 of cash on fire for every $100 in revenue.

Taking a step back, we can see that Myriad Genetics’s margin dropped by 1.4 percentage points during that time. It may have ticked higher more recently, but shareholders are likely hoping for its margin to at least revert to its historical level. Almost any movement in the wrong direction is undesirable because it’s already burning cash. If the longer-term trend returns, it could signal it’s becoming a more capital-intensive business.

Myriad Genetics’s free cash flow clocked in at $14.9 million in Q3, equivalent to a 7.2% margin. Its cash flow turned positive after being negative in the same quarter last year

EPS and free cash flow tell us whether a company was profitable while growing its revenue. But was it capital-efficient? A company’s ROIC explains this by showing how much operating profit it makes compared to the money it has raised (debt and equity).

Myriad Genetics’s five-year average ROIC was negative 33.2%, meaning management lost money while trying to expand the business. Its returns were among the worst in the healthcare sector.

We like to invest in businesses with high returns, but the trend in a company’s ROIC is what often surprises the market and moves the stock price. Over the last few years, Myriad Genetics’s ROIC has unfortunately decreased significantly. Paired with its already low returns, these declines suggest its profitable growth opportunities are few and far between.

Myriad Genetics reported $145.4 million of cash and $212.3 million of debt on its balance sheet in the most recent quarter. As investors in high-quality companies, we primarily focus on two things: 1) that a company’s debt level isn’t too high and 2) that its interest payments are not excessively burdening the business.

With $34.15 million of EBITDA over the last 12 months, we view Myriad Genetics’s 2.0× net-debt-to-EBITDA ratio as safe. We also see its $1.1 million of annual interest expenses as appropriate. The company’s profits give it plenty of breathing room, allowing it to continue investing in growth initiatives.

It was good to see Myriad Genetics beat analysts’ EPS expectations this quarter. We were also glad its full-year EBITDA guidance exceeded Wall Street’s estimates. On the other hand, its full-year EPS guidance missed. This seems to be weighing on shares, and the stock traded down 5.8% to $7.67 immediately after reporting.

Updated: November 25, 2025 at 11:32 PM EST

The latest quarterly earnings matters, sure, but we actually think longer-term fundamentals and valuation matter more. Investors should consider all these pieces before deciding whether or not to invest in Myriad Genetics.

We see the value of companies making people healthier, but in the case of Myriad Genetics, we’re out. First off, its revenue growth was mediocre over the last five years, and analysts expect its demand to deteriorate over the next 12 months. And while its astounding EPS growth over the last five years shows its profits are trickling down to shareholders, the downside is its diminishing returns show management's prior bets haven't worked out. On top of that, its relatively low ROIC suggests management has struggled to find compelling investment opportunities.

Myriad Genetics’s P/E ratio based on the next 12 months is 246.3x. This multiple tells us a lot of good news is priced in - we think other companies feature superior fundamentals at the moment.

Wall Street analysts have a consensus one-year price target of $8.38 on the company (compared to the current share price of $7.36).