Genetic testing company Myriad Genetics (NASDAQ: MYGN) fell short of the market’s revenue expectations in Q2 CY2026, with sales falling 10.5% year on year to $190.7 million. The company’s full-year revenue guidance of $780 million at the midpoint came in 9.7% below analysts’ estimates. Its non-GAAP loss of $0.25 per share was significantly below analysts’ consensus estimates.

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“In the second quarter, we continued to make meaningful progress on the Cancer Care Continuum on a number of fronts, including 6% year-over-year volume growth supported by the ramp up of our expanded sales team, the launch of Prolaris + AI, the expansion of Precise MRD to include colorectal cancer (CRC) and renal cancers, along with the submission of Precise MRD breast to MolDX,” said Sam Raha, President and CEO, Myriad Genetics.

Company Overview

Founded in 1991 as one of the pioneers in translating genetic discoveries into clinical applications, Myriad Genetics (NASDAQ: MYGN) develops genetic tests that assess disease risk, guide treatment decisions, and provide insights across oncology, women's health, and mental health.

Revenue Growth

A company’s long-term sales performance is one signal of its overall quality. Any business can experience short-term success, but top-performing ones enjoy sustained growth for years. Regrettably, Myriad Genetics’s sales grew at a mediocre 4% compounded annual growth rate over the last five years. This fell short of our benchmark for the healthcare sector and is a poor baseline for our analysis.

Long-term growth is the most important, but within healthcare, a half-decade historical view may miss new innovations or demand cycles. Myriad Genetics’s recent performance shows its demand has slowed as its revenue was flat over the last two years.

This quarter, Myriad Genetics missed Wall Street’s estimates and reported a rather uninspiring 10.5% year-on-year revenue decline, generating $190.7 million of revenue.

Looking ahead, sell-side analysts expect revenue to grow 10.9% over the next 12 months, an improvement versus the last two years. This projection is healthy and implies its newer products and services will catalyze better top-line performance.

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Adjusted Operating Margin

Adjusted operating margin is an important measure of profitability as it shows the portion of revenue left after accounting for all core expenses — everything from the cost of goods sold to advertising and wages. It’s also useful for comparing profitability across companies because it excludes non-recurring expenses, interest on debt, and taxes.

Myriad Genetics’s high expenses have contributed to an average adjusted operating margin of negative 1.7% over the last five years. Unprofitable healthcare companies require extra attention because they could get caught swimming naked when the tide goes out. It’s hard to trust that the business can endure a full cycle.

Looking at the trend in its profitability, Myriad Genetics’s adjusted operating margin decreased by 3.8 percentage points over the last five years. This performance was caused by more recent speed bumps as the company’s margin fell by 5 percentage points on a two-year basis. We’re disappointed in these results because they show its expenses were rising and it couldn’t pass those costs onto its customers.

This quarter, Myriad Genetics generated a negative 16.6% adjusted operating margin. The company’s consistent lack of profits raises a flag.

Earnings Per Share

We track the long-term change in earnings per share (EPS) for the same reason as long-term revenue growth. Compared to revenue, however, EPS highlights whether a company’s growth is profitable.

Myriad Genetics’s earnings losses deepened over the last five years as its EPS dropped 7.4% annually. We tend to steer our readers away from companies with falling EPS, where diminishing earnings could imply changing secular trends and preferences. If the tide turns unexpectedly, Myriad Genetics’s low margin of safety could leave its stock price susceptible to large downswings.

In Q2, Myriad Genetics reported adjusted EPS of negative $0.25, down from $0.05 in the same quarter last year. This print missed analysts’ estimates. Over the next 12 months, Wall Street is optimistic. Analysts forecast Myriad Genetics’s full-year EPS will flip from negative $0.30 to positive $0.18.

Key Takeaways from Myriad Genetics’s Q2 Results

We struggled to find many positives in these results. Its full-year revenue guidance missed and its revenue fell short of Wall Street’s estimates. Overall, this quarter could have been better. The stock traded down 28.6% to $3.84 immediately after reporting.

The latest quarter from Myriad Genetics’s wasn’t that good. One earnings report doesn’t define a company’s quality, though, so let’s explore whether the stock is a buy at the current price. What happened in the latest quarter matters, but not as much as longer-term business quality and valuation, when deciding whether to invest in this stock. We cover that in our actionable full research report which you can read here (it’s free).