Adding Cancer Test Capabilities And Mental Health Data Will Support Long-Term Progress

Key Takeaways

• Expansion into new genomic testing areas, improved operations, and greater test adoption are driving long-term revenue growth and higher test volumes.
  
• Strategic R&D investments, new partnerships, and disciplined cost management support margin expansion and sustained profitability.
  
• Rising payer pushback, high debt costs, heavy reliance on mature products, investor skepticism, and execution risk threaten sustained growth and strategic progress.

Catalysts

A molecular diagnostic testing and precision medicine company, develops and provides molecular tests in the United States and internationally.

• The company is accelerating growth in its oncology business by expanding beyond hereditary cancer testing into comprehensive genomic profiling, immuno-oncology response monitoring, and MRD (minimal residual disease), leveraging its established reputation with healthcare providers. This product and market expansion is likely to increase the company's addressable market, supporting long-term revenue growth.
  
• Increased adoption and reimbursement for genetic testing-including recent payer coverage wins for prenatal and mental health tests (GeneSight)-is driving stronger pricing and top-line revenue, as the secular trend of personalized medicine continues to expand and broader physician/patient awareness increases, improving both volume and average revenue per test.
  
• Operational improvements, such as fixing the prenatal order management system and enhancing EMR integrations in hereditary cancer testing, have resolved recent volume headwinds, positioning Myriad for recovering and accelerating test volumes in the second half of the year and into 2026, which will positively impact revenue growth.
  
• Strategic partnerships (e.g., with PATHOMIQ for AI-enhanced prostate cancer testing) and a focused investment in R&D for high-growth cancer applications will enable faster and more diverse test launches, driving future growth and supporting gross and net margin expansion as new, higher-value tests come to market.
  
• Ongoing financial discipline, improved revenue cycle management, and a more favorable reimbursement landscape (including new state biomarker law-driven coverage) have enabled the company to expand gross margins, and target growing revenue faster than operating expenses, which should drive sustained profit growth and higher earnings in the medium-to-long term.

Myriad Genetics Future Earnings and Revenue Growth

Assumptions

• Analysts are assuming Myriad Genetics's revenue will grow by 5.0% annually over the next 3 years.
• Analysts are not forecasting that Myriad Genetics will become profitable in next 3 years. To represent the Analyst Price Target as a Future PE Valuation we will estimate Myriad Genetics's profit margin will increase from -47.4% to the average US Biotechs industry of 16.1% in 3 years.
• If Myriad Genetics's profit margin were to converge on the industry average, you could expect earnings to reach $154.8 million (and earnings per share of $1.56) by about September 2028, up from $-395.2 million today.
• In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 5.8x on those 2028 earnings, up from -1.6x today. This future PE is lower than the current PE for the US Biotechs industry at 15.5x.
• Analysts expect the number of shares outstanding to grow by 2.21% per year for the next 3 years.
• To value all of this in today's terms, we will use a discount rate of 7.02%, as per the Simply Wall St company report.

Myriad Genetics Future Earnings Per Share Growth

Risks

• Ongoing reimbursement risk highlighted by UnitedHealthcare's negative GeneSight coverage decision, which led to a 12% revenue decline in the Pharmacogenomics business and could signal broader payer pushback, directly threatening long-term revenue and ASP growth in core products.
  
• High interest expense from the new $200 million OrbiMed loan (blended ~7% rate, initial tranche 11%) raises fixed costs and puts incremental pressure on net margins and earnings, especially if revenue growth underperforms projections.
  
• Continued dependence on mature hereditary cancer and mental health franchises (e.g., MyRisk, GeneSight), with limited evidence so far of material impact from new pipeline products, exposes the company to slower growth and potential share loss if competitors bring differentiated tests to market, impacting long-term revenue and EBIT growth.
  
• Significant impairment charge of $317 million against goodwill and intangibles, triggered by the prolonged decline in market capitalization, reflects lingering investor skepticism about Myriad's ability to convert strategy into sustained financial performance, which could hinder future earnings growth and capital raising flexibility.
  
• Execution risk around new strategic priorities (e.g., pivoting to the Cancer Care Continuum, forging additional partnerships, and launching new oncology and prenatal products) remains high given lack of disclosed KPIs, past under-delivery versus potential, and increasing competition, all of which threaten Myriad's ability to achieve their targeted high single
• to low double-digit revenue growth and profitability improvement.

Valuation

• The analysts have a consensus price target of $7.375 for Myriad Genetics based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $18.0, and the most bearish reporting a price target of just $3.5.
• In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be $963.8 million, earnings will come to $154.8 million, and it would be trading on a PE ratio of 5.8x, assuming you use a discount rate of 7.0%.
• Given the current share price of $6.8, the analyst price target of $7.38 is 7.8% higher. The relatively low difference between the current share price and the analyst consensus price target indicates that they believe on average, the company is fairly priced.
• We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.