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It hasn't been the best quarter for Myriad Genetics, Inc. (NASDAQ:MYGN) shareholders, since the share price has fallen 20% in that time. In contrast the stock is up over the last three years. However, it's unlikely many shareholders are elated with the share price gain of 47% over that time, given the rising market.

Check out our latest analysis for Myriad Genetics

While markets are a powerful pricing mechanism, share prices reflect investor sentiment, not just underlying business performance. One flawed but reasonable way to assess how sentiment around a company has changed is to compare the earnings per share (EPS) with the share price.

Over the last three years, Myriad Genetics failed to grow earnings per share, which fell 37% (annualized).

Thus, it seems unlikely that the market is focussed on EPS growth at the moment. Therefore, we think it's worth considering other metrics as well.

It could be that the revenue growth of 4.2% per year is viewed as evidence that Myriad Genetics is growing. In that case, the company may be sacrificing current earnings per share to drive growth, and maybe shareholder's faith in better days ahead will be rewarded.

You can see below how earnings and revenue have changed over time (discover the exact values by clicking on the image).

NasdaqGS:MYGN Income Statement, December 24th 2019

It's good to see that there was some significant insider buying in the last three months. That's a positive. On the other hand, we think the revenue and earnings trends are much more meaningful measures of the business. So we recommend checking out this free report showing consensus forecasts

Investors in Myriad Genetics had a tough year, with a total loss of 8.9%, against a market gain of about 40%. Even the share prices of good stocks drop sometimes, but we want to see improvements in the fundamental metrics of a business, before getting too interested. Unfortunately, last year's performance may indicate unresolved challenges, given that it was worse than the annualised loss of 6.9% over the last half decade. Generally speaking long term share price weakness can be a bad sign, though contrarian investors might want to research the stock in hope of a turnaround. If you want to research this stock further, the data on insider buying is an obvious place to start. You can click here to see who has been buying shares - and the price they paid.

Myriad Genetics is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on US exchanges.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.

Read the rest here:
Does Myriad Genetics's (NASDAQ:MYGN) Share Price Gain of 47% Match Its Business Performance? - Yahoo Finance

This entry was posted on December 26, 2019 at 7:44 am and is filed under Genetics. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed. |