NEW YORK ( TheStreet) -- Myriad Genetics (Nasdaq: MYGN) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures and increase in net income. However, as a counter to these strengths, we find that the stock has had a generally disappointing performance in the past year. Highlights from the ratings report include:
- The revenue growth came in higher than the industry average of 6.4%. Since the same quarter one year prior, revenues rose by 20.2%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- MYGN has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Along with this, the company maintains a quick ratio of 12.62, which clearly demonstrates the ability to cover short-term cash needs.
- MYRIAD GENETICS INC has improved earnings per share by 20.8% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, MYRIAD GENETICS INC reported lower earnings of $1.11 versus $1.54 in the prior year. This year, the market expects an improvement in earnings ($1.24 versus $1.11).
- Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. Compared to other companies in the Biotechnology industry and the overall market, MYRIAD GENETICS INC's return on equity exceeds that of both the industry average and the S&P 500.
- MYGN has underperformed the S&P 500 Index, declining 7.19% from its price level of one year ago. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.