Should Investors Cut Losses or Ride Out the Storm in Myriad Genetics (MYGN)?

The genetic testing sector, once a beacon of innovation in healthcare, has become a battleground of promise and peril. For Myriad Genetics (MYGN), the stakes are high as investors weigh whether to cut losses amid recent headwinds or ride out what could be a transformative phase for the company. The answer lies in dissecting the interplay of macroeconomic pressures, competitive dynamics, and the company's strategic pivot toward precision oncology.

Challenges: Revenue Slumps and Market Headwinds

Myriad's third-quarter 2025 results underscored its vulnerabilities. Revenue fell 4% year-over-year to $205.7 million, driven by the discontinuation of UnitedHealthcare coverage for its GeneSight pharmacogenomics test and the divestiture of its European EndoPredict business. These setbacks highlight the fragility of revenue streams in a sector increasingly shaped by payer policies and regulatory shifts. Meanwhile, the broader genetic testing market, though projected to grow at a 22.6% CAGR through 2034, is fiercely competitive. Myriad's 0.61% year-on-year revenue growth in Q2 2025 lagged behind the 14.31% average of its peers, signaling operational inefficiencies in a rapidly evolving landscape.

The macroeconomic context adds to the unease. Rising interest rates and tighter credit conditions have dampened investor appetite for high-growth biotech plays, while payers continue to scrutinize the cost-effectiveness of genetic tests. Myriad's GAAP net loss of $27.4 million in Q3 2025-despite adjusted EBITDA of $10.3 million-reflects the tension between short-term profitability and long-term R&D investments.

Opportunities: Innovation and Strategic Resilience

Yet, Myriad's story is not one of decline alone. The company has doubled down on its Cancer Care Continuum (CCC) strategy, leveraging volume growth in hereditary cancer testing to offset declines elsewhere. Hereditary cancer test volumes rose 11% year-over-year, with the expanded MyRisk test now analyzing 63 genes-a critical upgrade aligned with NCCN and ASCO guidelines. This focus on high-margin, clinically validated tests has preserved a robust gross margin of 69.9%, a rare bright spot in a sector grappling with pricing pressures.

Strategic partnerships are further bolstering Myriad's position. Its collaboration with SOPHiA GENETICS to develop a liquid biopsy companion diagnostic for pharmaceutical companies positions it at the forefront of personalized cancer care. Similarly, the planned launch of AI-enabled Prolaris testing and a Molecular Residual Disease (MRD) test for breast cancer in 2026 signals a commitment to innovation that could differentiate Myriad in a crowded market.

Financially, the company has fortified its balance sheet with a new $200 million credit facility, providing flexibility to fund growth initiatives. While 2025 revenue guidance of $840–860 million implies a modest 0.5% increase from 2024's $836–838 million range, the emphasis on adjusted EBITDA of $25–35 million suggests a pivot toward profitability.

Risk-Reward Analysis: A Tenuous Balance

The question for investors hinges on risk tolerance. Myriad's stock currently trades at a discount to its 2025 price targets, which average $11.60–$12.45, implying a potential 40–70% upside from its recent $6.02 level. However, the wide dispersion of analyst ratings-from "Hold" to "Buy"-reflects uncertainty. Optimists point to the company's leadership in hereditary cancer testing and its pipeline of AI-driven diagnostics, while skeptics cite the lack of near-term catalysts and the threat of DTC competitors like 23andMe eroding market share.

A critical factor is Myriad's ability to integrate its innovations into clinical workflows. The planned integration of oncology tests with EMR systems like Epic and Flatiron could enhance adoption, but success depends on overcoming interoperability challenges. Similarly, the expansion of MRD testing-a nascent but high-growth segment-requires validation in real-world trials.

Conclusion: A Calculated Hold

For investors with a medium-term horizon, Myriad presents a compelling case of "buy the dip" in a sector poised for disruption. Its strategic bets on precision oncology and AI-driven diagnostics align with long-term trends, and its financial flexibility provides a buffer against near-term volatility. However, the path to growth is fraught with execution risks, particularly in monetizing its R&D pipeline and navigating payer pushback.

Cutting losses may be prudent for those who cannot stomach the volatility or see limited upside in a stock that remains unprofitable on a GAAP basis. But for those who believe in the transformative potential of genetic testing-and Myriad's ability to adapt-riding out the storm could yield substantial rewards. As the company prepares to release its Q4 2024 results in February 2025, the coming months will be pivotal in determining whether Myriad can turn its CCC strategy into a catalyst for sustained growth.