Last update on 2024-06-07

Myriad Genetics (MYGN) - Piotroski F-Score Analysis for Year 2023 (Final Score: 3/9)

Myriad Genetics (MYGN) 2023 Piotroski F-Score analysis reveals financial struggles with a score of 3/9 based on profitability, liquidity, and efficiency criteria.

Short Analysis - Piotroski Score: 3

We're running Myriad Genetics (MYGN) against the Piotroski 9-criteria scoring system to assess profitability, liquidity, and operating efficiency:

Piotroski Score: 3 for Myriad Genetics (MYGN): Myriad Genetics has struggled in terms of profitability, with a significantly negative net income in 2023, declining operating cash flow from a peak in 2014 to negative cash flow today, and worsening ROA. Although operating cash flow is higher than net income, it is still suffering losses. In terms of liquidity and leverage: there's a slight improvement in the current ratio but an increase in leverage, signaling more debt usage. The number of outstanding shares has increased leading to shareholder dilution. Despite these adversities, MYGN showed slight improvements in its asset turnover ratio.

Insights for Value Investors Seeking Stable Income

Based on the Piotroski F-Score of 3, Myriad Genetics (MYGN) seems to be facing financial difficulties with losses in profitability and increasing leverage. With current financial instability and shareholder dilution, it may not be the best stock for conservative investors. However, those willing to take on higher risk for potentially significant future returns might find it worthwhile to keep an eye on MYGN for any signs of recovery.

For those who are interested in delving deeper into the specifics, the subsequent section provides a comprehensive exploration of the criteria.

Profitability of Myriad Genetics (MYGN)

Company has a positive net income?

Net income examines the overall profitability of the company. Positive net income indicates profitability while negative net income signals losses.

For Myriad Genetics in 2023, the net income is -$263,300,000, which is significantly negative. This negative trend, coupled with the net incomes from prior years, shows a concerning pattern; over the last five years, the company has struggled with profitability, marked by fluctuating negative net incomes. Positive net incomes from 2008 to 2017, where peak profitability reached $176,225,000 in 2014, demonstrate the company's capability to generate profit under favorable conditions. More recent performance, however, exposes continuous operational losses and raises alarms regarding its financial stability. Therefore, this criterion yields 0 points for 2023.

Company has a positive cash flow?

Cash Flow from Operations examines the cash inflows and outflows solely from a company's main operational activities, excluding other sources of revenue.

For Myriad Genetics (MYGN), the CFO is negative, standing at -$110.9 million. Given the past 20 years of data, this is one of the lowest CFO figures recorded. The trend from a peak of $190.2 million in 2014 to continuously decreasing figures, leading to the current negative figure, signals operational difficulties and potential cash flow management issues. Thus, the CFO metric gets a score of 0.

Return on Assets (ROA) are growing?

The Return on Assets (ROA) criterion examines a company's efficiency in generating profit from its assets. An increase indicates improved performance and profitability.

For Myriad Genetics (MYGN), the ROA in 2023 is -0.2245, compared to -0.0889 in 2022. This decline signifies a worsening in asset utilization efficiency, thus earning 0 points. Additionally, when the ROA trend is juxtaposed with the industry median (ranging around 0.4344 to 0.504 over the past 20 years), it underscores MYGN's ongoing challenges in aligning with industry standards. This downside is grist to the mill for medium-term concerns.

Operating Cashflow are higher than Netincome?

The criterion measures the ability of the business to convert its net income into cash flow. This is important as cash flow is considered a more reliable indicator of financial health.

For 2023, Myriad Genetics (MYGN) recorded an operating cash flow of -$110.9 million compared to a net income of -$263.3 million. Since the operating cash flow is higher than the net income, even though both figures are negative, we allocate 1 point for this criterion. This scenario indicates that while the company is operating under a loss, its cash expenses are lower than its income loss. This is a slightly favorable sign, suggesting that cash flow management is less pessimistic than net income readings would suggest.

Liquidity of Myriad Genetics (MYGN)

Leverage is declining?

Change in Leverage assesses whether the company has become more or less dependent on debt over the period. A decreased leverage indicates financial prudence.

Comparing the leverage ratios of 0.1092 in 2022 and 0.1185 in 2023, there's a noticeable increase. This uptick suggests that Myriad Genetics has augmented its reliance on debt. Historically, the company has fluctuated from a leverage of 0.0809 in 2017 to highs such as 0.2003 in 2020. Given the recent increase to 0.1185, this trend might point toward heightened financial risk or strategic borrowing by the firm. For Piotroski analysis, this results in a score of 0 for this criterion.

Current Ratio is growing?

This criterion examines the change in the current ratio, which measures a company's ability to pay short-term obligations with its short-term assets. An increase in the current ratio indicates improved liquidity.

The Current Ratio of Myriad Genetics increased from 2.0015 in 2022 to 2.0115 in 2023, earning the company an additional point in the Piotroski Analysis. This indicates a slight improvement in its liquidity position, suggesting Myriad Genetics is in a marginally stronger position to cover its short-term obligations. Comparing this with the industry median, which was 2.3682 in 2023, Myriad Genetics' liquidity is below average. Over the last 20 years, MYGN's ratio has fluctuated widely, reaching highs above 17 in 2010 and sinking to below industry median since 2019, signaling variable management of working capital over time.

Number of shares not diluted?

Change in Shares Outstanding measures whether a company is issuing new shares or buying back shares, reflecting shareholders' ownership dilution or concentration, respectively.

For Myriad Genetics (MYGN), the Outstanding Shares have increased from 80,600,000 in 2022 to 82,800,000 in 2023. Given this increase of 2,200,000 shares year-over-year, it signifies that the company has issued additional shares and consequently, each shareholders' ownership percentage is diluted. Therefore, no point is added for this criterion. Review of the last 20 years of Outstanding Shares reveals a trend of periodic fluctuations with significant increases from 2003 to 2013, moderation between 2013 and 2016, a downtrend until 2017, followed by minor increases again till date. The cumulative effect is a dilution, not a buyback trend, thus marking this trend as neutral to slightly negative for existing shareholders observing long-term value retention. It seems share issuance is a recurring operational choice by the management.

Operating of Myriad Genetics (MYGN)

Cross Margin is growing?

Change in Gross Margin measures a company's profitability by examining the ratio of gross profit to revenue. Increasing gross margins indicate improved efficiency.

Myriad Genetics' (MYGN) gross margin decreased from 0.7022 in 2022 to 0.6864 in 2023, resulting in a score of 0 for this criterion. Over two decades, the company's gross margin has generally experienced a downward trend from 0.8048 in 2003. Both MYGN’s and the industry’s gross margin showing opposite trends. Industry Median Gross Margin for 2023 stands noticeably lower at 0.504, revealing MYGN's still-exceptional performance despite the recent decline. This mixed historical trend prompts further analysis for investors.

Asset Turnover Ratio is growing?

The Asset Turnover Ratio measures a firm's efficiency at using its assets to generate revenue. An increased ratio indicates improved efficiency.

Myriad Genetics' Asset Turnover Ratio increased from 0.5385 in 2022 to 0.6423 in 2023, reflecting an improvement in efficiency at using its assets to generate revenue. This is a favorable trend, signified by the addition of 1 point in the Piotroski Analysis. Historical data shows the Asset Turnover Ratio fluctuating, with peaks near 0.9563 in 2014 and valleys like 0.3052 in 2004. This increase in 2023 positions the company well compared to recent years.