Shareholders in Myriad Genetics (NASDAQ:MYGN) have lost 41%, as stock drops 7.0% this past week

Ideally, your overall portfolio should beat the market average. But even the best stock picker will only win with some selections. So we wouldn’t blame long term Myriad Genetics, Inc. (NASDAQ:MYGN) shareholders for doubting their decision to hold, with the stock down 41% over a half decade. It’s down 44% in about a quarter.

If the past week is anything to go by, investor sentiment for Myriad Genetics isn’t positive, so let’s see if there’s a mismatch between fundamentals and the share price.

View our latest analysis for Myriad Genetics

Because Myriad Genetics made a loss in the last twelve months, we think the market is probably more focussed on revenue and revenue growth, at least for now. When a company doesn’t make profits, we’d generally hope to see good revenue growth. That’s because it’s hard to be confident a company will be sustainable if revenue growth is negligible, and it never makes a profit.

In the last half decade, Myriad Genetics saw its revenue increase by 2.0% per year. That’s far from impressive given all the money it is losing. Given the weak growth, the share price fall of 7% isn’t particularly surprising. Investors should consider how bad the losses are, and whether the company can make it to profitability with ease. It could be worth putting it on your watchlist and revisiting when it makes its maiden profit.

The image below shows how earnings and revenue have tracked over time (if you click on the image you can see greater detail).

Myriad Genetics is a well known stock, with plenty of analyst coverage, suggesting some visibility into future growth. If you are thinking of buying or selling Myriad Genetics stock, you should check out this free report showing analyst consensus estimates for future profits.

A Different Perspective

While the broader market gained around 34% in the last year, Myriad Genetics shareholders lost 18%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. Unfortunately, last year’s performance may indicate unresolved challenges, given that it was worse than the annualised loss of 7% over the last half decade. We realise that Baron Rothschild has said investors should “buy when there is blood on the streets”, but we caution that investors should first be sure they are buying a high quality business. It’s always interesting to track share price performance over the longer term. But to understand Myriad Genetics better, we need to consider many other factors. Case in point: We’ve spotted 4 warning signs for Myriad Genetics you should be aware of.

If you are like me, then you will not want to miss this free list of undervalued small caps that insiders are buying.

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

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.