) has watched all 13 estimates for fiscal 2013 move higher in the
last 60 days, following a strong fiscal first-quarter report that
included a raised guidance for the full year. This molecular
diagnostic company has now delivered positive earnings surprises
for 10 consecutive quarters with an average beat of 8.6%. A robust
portfolio, an expected long-term earnings growth rate of 10.9% and
a year's return of 35.8% make this Zacks #1 Rank (Strong Buy) stock
an attractive possibility for growth-seeking investors.
A Winning Quarter
On November 5, Myriad reported fiscal first-quarter earnings per
share of 36 cents, beating the Zacks Consensus Estimate by 12.5%
and the year-ago earnings by 24%.
Revenues increased 21% year over year to $133.4 million, beating
the Zacks Consensus Estimate of $130.0 million. The company's
Molecular diagnostic testing business recorded sales growth of 22%
to $127.3 million, while the Companion diagnostic services business
had a sales slump of 4.6% to $6.2 million.
The company's flagship product Bracanalysis (representing 78.7% of
total revenues during the quarter) has been recording robust growth
over the past few quarters on the back of increasing penetration in
both Oncology and Women's Health markets. In the last reported
quarter, revenue for this product jumped 17% to $105 million.
In addition, revenues derived from Colaris and Colaris AP, which
assess a patient's risk of developing hereditary colorectal and
uterine cancers, increased 26% to $12.1 million. The robust growth
of the Colaris franchise was driven by an increase in demand and
higher revenue per test due to the inclusion of a fourth gene,
PMS2, along with market share gains.
Moreover, the company enjoys a strong and diversified pipeline
across six major medical specialties. In the last earnings call,
Myriad's announcement of its expected launch of the molecular
diagnostic test Melapath in 2013 has acted as another impetus in
driving the share price up.
Furthermore, the company has progressed well in receiving
reimbursements for the BART (Brac Analysis Large Rearrangement
Technology) test. Following the Noridian Administrative Services
announcement,, Medicare has started reimbursing the test for
patients with a personal history of breast or ovarian cancer.
Myriad has already received a huge number of testing requests.
Myriad Genetics raised its outlook for fiscal 2013. The company now
expects revenues between $570 million and $585 million (previous
guidance was $550-$565 million), reflecting growth of 15-18%. The
raised guidance is primarily based on an improved outlook for the
Molecular Diagnostics segment, which is expected to gross $545-$557
million in the fiscal year. The guidance for Companion diagnostic
remained unchanged at $25-$28 million. Earnings per share for the
fiscal year is likely to be in a range of $1.50-$1.55, up from the
previous range of $1.44-$1.48.
Rising Earnings Estimates
Over the past 60 days, the Zacks Consensus Estimate for fiscal 2013
has gained 4.8% to $1.54 per share as all 13 estimates were revised
upward. This represents year-over-year growth of about 18.8%.
Meanwhile, the Zacks Consensus Estimate for 2014 is up 4.1% to
$1.76 on the back of positive revisions from 12 of 13 estimates.
This indicates estimated growth of about 14.1% year over year.
Myriad Genetics is currently trading at a forward P/E of 19.44x, a
21.4% discount to the peer group average of 22.35x. Additionally,
the price-to-book ratio of 3.5 is in line with the peer group
average. The company's trailing 12 month return on equity (ROE) of
18.5% is well ahead of the peer group average of 9.8%. Shares also
look attractive with a return on investment (ROI) of 18.5%, which
is substantially higher than the peer group average of 8.3%. Return
on assets (ROA) stands at 17.0%, a lofty premium compared to the
peer group average of 7.0%.
Myriad Genetics employs a number of proprietary technologies to
target the genetic basis of human diseases and the role these genes
might play in the onset, progression and treatment of diseases. So
far, Myriad has launched nine commercial molecular diagnostic
products, including five predictive medicine (designed to assess an
individual's risk for developing a disease later in life), three
personalized medicine (identification of a patient's probability of
responding to drug therapy) and one prognostic medicine (assess a
patient's risk of disease progression and recurrence) product.
Myriad has a market capitalization of $2.21 billion.
Other Zacks #1 Rank (Strong Buy) medical devices stocks include
Omnicell Inc. (
) and Mesa Laboratories Inc. (
Want More of Our Best Recommendations?
Zacks' Executive VP, Steve Reitmeister, knows when key trades
are about to be triggered and which of our experts has the hottest
hand. Then each week he hand-selects the most compelling trades and
serves them up to you in a new program called
MYRIAD GENETICS (MYGN): Free Stock Analysis
To read this article on Zacks.com click here.