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On Tuesday, Scotiabank increased its price target for Myriad Genetics (NASDAQ:MYGN), a global leader in personalized medicine, from $29.00 to $34.00 while maintaining a Sector Outperform rating on the stock.
This adjustment follows Myriad Genetics' reported earnings for the second quarter of 2024, which surpassed expectations and prompted the company to raise its full-year guidance.
Myriad Genetics experienced a robust second quarter in 2024, with a notable year-over-year revenue increase of 19% in Hereditary Cancer Testing, particularly in the U.S. market, which saw a 25% growth. The company also reported a 29% rise in Prenatal revenues, with the U.S. contributing a 25% increase, and a 22% growth in GeneSight.
Overall test volumes expanded by 9% compared to the previous year, while the average revenue per test escalated by 6%, attributed to ongoing revenue cycle management and new state biomarker legislation.
The company's adjusted operating expenses went up by 6% year-over-year, a figure that stands in contrast to the 15% sales growth. These numbers reflect the success of Myriad Genetics' efficiency and productivity initiatives across its research and development and administrative departments. These efforts have resulted in positive adjusted EBITDA and adjusted earnings per share for the quarter.
Looking ahead, Myriad Genetics is preparing for the commercial launch of its pipeline products, including FirstGene, Precise Liquid, and Precise MRD, which are expected to roll out between 2025 and early 2026.
These upcoming products are not currently included in the company's projected long-term revenue compound annual growth rate (CAGR) of approximately 12%, an increase from the previously estimated 10% CAGR announced in September 2023.
In anticipation of further details to be shared at the upcoming Investor Day in October, Scotiabank has raised its revenue estimates for Myriad Genetics for 2024 and beyond.
The new price target of $34 still represents a roughly 33% discount compared to the peer group on a 2025 estimated enterprise value to sales basis, according to the analyst's comments.
In other recent news, Myriad Genetics has seen several updates from financial analysts. Jefferies has raised its target price for the company's stock to $22, while TD Cowen has increased its target to $30.
Scotiabank has initiated coverage on Myriad Genetics with a Sector Outperform rating and a price target of $29. Piper Sandler has also raised its price target to $28 and maintained an Overweight rating.
These changes follow Myriad Genetics' recent financial performance, which included a revenue of $211.5 million in the second quarter, exceeding analyst expectations by $5 million or 2%. The company also reported a 9% year-over-year growth in test volume and a 19% increase in Hereditary Cancer Testing.
The company has revised its 2024 revenue guidance to $835-845 million and increased its long-range plan for revenue growth to 12%. Operational expenses for the year are expected to be between $575-585 million and earnings per share estimates have been increased from $0.08 to $0.12.
In addition to these financial updates, Myriad Genetics has secured a new patent for its molecular residual disease assay technology. The company is also undergoing a significant transformation aimed at optimizing its product portfolio and operational capabilities. These are among the recent developments for Myriad Genetics.
InvestingPro Insights
Following Scotiabank's revised price target for Myriad Genetics (NASDAQ:MYGN), the latest metrics from InvestingPro provide a deeper financial perspective on the company's performance. Myriad Genetics' market capitalization stands at $2.53 billion, reflecting its substantial presence in the personalized medicine industry. Despite a negative P/E ratio for the last twelve months as of Q2 2024, indicating the company was not profitable during that period, revenue growth has been impressive at nearly 14.78% year-over-year. This growth is a testament to the company's expanding market reach and successful product offerings.
In terms of stock performance, Myriad Genetics has seen a significant return, with a price total return of 56.23% over the last year and a 31.16% increase over the last six months, trading near its 52-week high. This aligns with Scotiabank's optimistic outlook and supports the increased price target. For investors considering the volatility of the stock, it's worth noting that InvestingPro Tips highlight the stock's movements as quite volatile, which may be a factor for risk assessment.
Additionally, with five analysts having revised their earnings upwards for the upcoming period and predictions that the company will become profitable this year, the forward-looking sentiment around Myriad Genetics is positive. Investors can explore further insights and tips, including 9 additional InvestingPro Tips for Myriad Genetics, by visiting https://www.investing.com/pro/MYGN.
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