Earnings momentum for
) has been on the rise ever since this molecular diagnostic company
released strong fiscal first-quarter results earlier this month
that included an upbeat guidance. Shares of this Zacks #1 Rank
(Strong Buy) have also advanced and reached a 52-week high of
$30.48 on November 14. With a robust portfolio, a strong earnings
surprise history, increased guidance and a year-to-date return of
45.7%, Myriad Genetics offers an attractive investment opportunity.
On November 5, Myriad Genetics 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%. The company has
now delivered positive earnings surprises for 7 straight quarters
with an average beat of 9.1%.
Revenues increased 21% year over year to $133.4 million, beating
the Zacks Consensus Estimate of $130.0 million. Myriad's two
businesses - Molecular diagnostic testing and Companion diagnostic
services - recorded revenues of $127.3 million (up 22% year over
year) and $6.2 million (down 4.6%), respectively.
The company's flagship product, Bracanalysis (representing 78.7% of
total revenues during the quarter), has been growing robustly over
the past few quarters on the back of increasing penetration in both
the Oncology and Women's Health markets. In the last reported
quarter, this product recorded a 17% jump in revenues 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.
Moreover, the company is enjoying a strong and diversified pipeline
across six major medical specialties. In the last earnings call,
Myriad's announcement of its expected launch of molecular
diagnostic test Melapath in 2013 has acted as another impetus in
driving the share price higher. Melapath is expected to play a
ground-breaking role in determining whether a skin biopsy is
malignant or benign. The company is confident about the potential
of Melapath, which has achieved 95% accuracy in predicting which
suspicious skin lesions are malignant and has an anticipated market
opportunity of $400 million a year in the US.
Furthermore, the company has progressed in receiving reimbursements
for the BART (Brac Analysis Large Rearrangement Technology) test.
The Noridian Administrative Services announced that Medicare would
reimburse the test for patients with a personal history of breast
or ovarian cancer from October 1, 2012 onwards. Myriad has already
started receiving 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
million to $557 million in the fiscal year. The guidance for the
Companion diagnostic remained unchanged at $25 million to $28
million. Earnings per share for the fiscal year is likely to be in
a range of $1.50 to $1.55, up from the previous range of
Rising Earnings Estimates
Over the past 30 days, the Zacks Consensus Estimate for 2012 has
gained 5.4% to $1.55 per share, thanks to upward revisions from all
13 estimates. This represents year-over-year growth of about 18.9%.
Meanwhile, the Zacks Consensus Estimate for 2013 is up 4.7% to
$1.77 on positive revisions from 12 of 13 estimates. This indicates
growth of about 14.7% year over year.
Chart Reflects Strength
Myriad's price performance has been reasonably strong with the
chart showing an upward trend. Following the release of its first
quarter results, the stock showed a steep uptrend and is currently
trading above both its 50- and 200-day averages. A series of
earnings beats, rising estimates and upbeat growth prospects make
Myriad worth considering as a momentum stock.
Headquartered in Salt Lake City, Utah, 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 the respective 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 $2.45 billion.
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