Genetic testing company Myriad Genetics (NASDAQ: MYGN) reported Q3 2026 results beating Wall Street’s revenue expectations, but sales fell by 1.5% year on year to $202.7 million. The company’s full-year revenue guidance of $785 million at the midpoint came in 0.9% above analysts’ estimates. Its non-GAAP loss of $0.11 per share was 44.9% above analysts’ consensus estimates.

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StockStory’s take

Myriad Genetics' third quarter was marked by the company's decision to divest its prenatal health business and continued efforts to address reimbursement pressures in hereditary cancer testing. Management highlighted volume growth in Cancer Care Continuum and mental health tests, partially offset by weakness in prenatal health. CEO Sam Raha attributed sequential improvements in average revenue per test to early progress in revenue cycle management and payer engagement initiatives, noting these actions are central to restoring profitability and operational stability.

Looking ahead, Myriad Genetics' updated guidance is shaped primarily by its sharpened strategic focus on cancer care and mental health diagnostics following the prenatal health divestiture. Management expects the transaction to improve margins, enhance financial flexibility, and drive revenue growth, with ongoing investments in reimbursement optimization and operational efficiency. CFO Ben Wheeler emphasized, “We expect meaningful progress in profitability in 2027 as the business becomes more focused and benefits from the Ascend initiative and new product launches in cancer care.”

Key insights from management’s remarks

Management attributed quarterly performance to higher test volumes in cancer care and mental health, progress in reimbursement initiatives, and steps to streamline operations amid ongoing industry challenges.

• Prenatal business divestiture: Myriad Genetics reached a definitive agreement to sell its prenatal health business to Labcorp, aiming to focus resources on cancer care and mental health. Management described the sale as "transformational" for the company's financial profile and future growth prospects.
• Hereditary cancer test (HCT) trends: Despite continued reimbursement headwinds, hereditary cancer testing volumes grew, with management crediting clinical guideline expansions and improved commercial execution. CEO Sam Raha highlighted that unaffected HCT volumes reached their highest level in three years.
• Reimbursement optimization progress: Management reported early progress in reducing denials and improving average revenue per test through targeted revenue cycle initiatives and payer engagement. CFO Ben Wheeler noted that improvement in reimbursement is not due to contract changes but rather efforts to address payer denials and revenue cycle friction.
• Ascend operational initiative: The company continued implementing the Ascend program, designed to modernize operations, enhance productivity, and reduce costs. Management described this as a multi-year effort involving process improvements and new technology, with initial actions already underway.
• Product development momentum: Myriad reported positive interim data for its Precise MRD (minimal residual disease) cancer test, which demonstrated early detection capabilities in colorectal cancer patients. The company expects reimbursement for breast cancer applications in 2027 and is closely monitoring early access customer feedback.

Drivers of future performance

Myriad Genetics expects future performance to be shaped by its streamlined business focus, operational initiatives, and the pace of reimbursement improvements.

• Cancer care focus post-divestiture: Following the prenatal health business sale, management expects higher revenue growth and improved gross margins, with resources concentrated on the Cancer Care Continuum and mental health diagnostics.
• Reimbursement environment as a risk: Management cautioned that hereditary cancer testing average revenue per test may face ongoing 1%-5% annual declines due to reimbursement friction and payer denials, though early initiatives have shown progress in mitigating these headwinds.
• Operational efficiency and product launches: The Ascend initiative and further clinical guideline expansions are expected to support margin improvement and test volume growth. Management also highlighted upcoming reimbursement for Precise MRD in breast cancer as a potential revenue driver.

Catalysts in upcoming quarters

In the coming quarters, the StockStory analyst team will monitor (1) the closing and operational transition of the prenatal health divestiture, (2) the effectiveness of Ascend-related productivity and cost initiatives, and (3) trends in reimbursement rates and test volumes within the Cancer Care Continuum and mental health segments. We will also watch for updates on reimbursement progress and early commercial traction for new products like Precise MRD.

Myriad Genetics currently trades at $6.67, up from $6.02 just before the earnings. Is there an opportunity in the stock? The answer lies in our full research report (it’s free).

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