By Ben Levisohn

When a stock has been beaten up as badly as Myriad Genetics (MYGN) hasits dropped 57% during the past 12 monthsit doesnt take much to move it higher. So it shouldnt come as too much of a surprise that shares of Myriad are soaring today after the genetic testing company beat earnings forecasts and offered upbeat guidance.

Myriad reported a profit of 26 cents a share, topping forecasts for 24 cents, on revenue of $196.5 million, beating the Street consensus for $190.1 million. Myriad also said it expects to earn between $1 and $1.05 in 2017, ahead of analyst forecasts of 98 cents.

So is the worst over? Maybe, but Cowens Doug Schenkel and team argue that Myriads shares are fairly valued. They explain why:

Myriad remains in a transformation phase and visibility on the revenue growth outlook continues to be limited. For example, there are several key decisions in the next 3 months that could affect Myriads outlook, including: (1) a CMS Editorial review board to review CPT coding for hereditary cancer panels (Feb. 10-11; link); (2) a final Vectra DA CMS reimbursement decision (LCD comment period ends March 23); (3) a final Prolaris LCD intermediate risk decision (comment period ends March 23); and (4) a UHC contract decision for hereditary cancer testing (current contract ends in May).

Although the share price continues to decline, we still believe shares are about fairly valued considering the number of uncertainties across business segments. Relative to peers Myriad still trades at a slight P/E premium, but at a ~30% EBITDA discount.

Shares of Myriad Genetics have jumped 10% to $16.99 at 10:38 a.m. today.

Original post:
Myriad Genetics: Fairly Valued? - Barron's (blog)