Myriad Genetics Inc (MYGN, Financial) recently experienced a daily loss of 2.95%, yet it has seen a notable 3-month gain of 21.24%. With a Loss Per Share of $3.36, investors are prompted to question whether the stock is modestly undervalued. This article aims to delve into the valuation analysis of Myriad Genetics, encouraging readers to explore the financial nuances that could influence their investment decisions.
Company Introduction
Myriad Genetics Inc (MYGN, Financial) is a molecular diagnostics company that plays a pivotal role in assessing disease risk through its testing services. The firm's innovative products, such as MyRisk, BRACAnalysis CDx, GeneSight, and Prequel, have solidified its position in the market. With the recent launch of Precise Oncology Solutions, Myriad Genetics continues to expand its diagnostic and prognostic test offerings. A critical comparison between the current stock price of $19.78 and the GF Value of $24.9 lays the foundation for a deeper evaluation of the company's intrinsic worth.
Summarize GF Value
The GF Value is a proprietary metric used to determine the intrinsic value of a stock, incorporating historical trading multiples, an adjustment factor based on past performance, and future business projections. Myriad Genetics (MYGN, Financial) currently appears modestly undervalued according to the GF Value, suggesting that the stock may offer a higher long-term return compared to its business growth. This conclusion is based on the stock's trading history, its past growth, and anticipated future performance.
Financial Strength
Investors must assess a company's financial strength to mitigate the risk of capital loss. Myriad Genetics' cash-to-debt ratio of 0.43 places it below the industry median, suggesting fair financial health. The company's financial strength is rated 6 out of 10, which supports its moderate valuation.
Profitability and Growth
Myriad Genetics' track record of profitability over the past decade is commendable. Despite a Loss Per Share of $3.36 and an operating margin of -37.04%, the company's profitability rank of 5 out of 10 denotes a fair standing. However, its growth metrics, including a 3-year average annual revenue decline of 9.1%, highlight challenges that need to be addressed to improve its market valuation.
ROIC vs WACC
Comparing Return on Invested Capital (ROIC) to the Weighted Average Cost of Capital (WACC) helps gauge a company's efficiency in generating returns on investment. Myriad Genetics' ROIC of -27.31 is lower than its WACC of 14.94, indicating that it is not currently creating value for shareholders.
Conclusion
In summary, Myriad Genetics (MYGN, Financial) presents signs of modest undervaluation. The company's fair financial condition and profitability, coupled with its less-than-ideal growth and value creation metrics, paint a complex picture for investors. Those interested in a more detailed exploration of Myriad Genetics can review its 30-Year Financials here.
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This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
