As shares of Myriad Genetics show no signs of returning to their peak from over two decades ago, one firm double-downgraded the already depressed stock, saying the company's latest earnings cast doubt on the biotech company's ability to become consistently profitable.

Piper Sandler analysts cut their rating on Myriad stock to Underweight from Overweight, with a $2 price target, down from $5.45. Shares slid 7% to $3 on Tuesday.

Myriad cannot grow or cut its way to profitability under its current model, according to the firm, which suggests selling assets instead to create shareholder value.

That strategy, however, may be a non-starter. When Myriad conducted a strategic review early last year, it chose not to sell any assets-a move Piper Sandler interprets as evidence of limited buyer interest.

The company has struggled to achieve consistent profitability in recent years. Although Myriad narrowed its net loss in the latest second quarter, it remained deeply unprofitable, with management pointing to persistent softness in Myriad's prenatal testing business.

The company posted $190.7 million in revenue, marking an 11% drop from the previous year and falling short of analysts' calls for $206 million. The drop was driven by a 1% decrease in testing volume coupled with a 9% decline in revenue per test.

While management contended that the drop in prices was caused by accounting adjustments related to older unpaid bills, the figure was still down 3% from last year excluding that headwind.

On the back of its latest quarterly results, Myriad slashed its 2026 revenue guidance and lowered its gross margin outlook. The company also launched an efficiency initiative alongside an ongoing strategic review and suspended its prior full-year outlook for adjusted earnings before interest, taxes, depreciation, and amortization, citing uncertainty over the initiative's timing and financial impact.

Management now expects revenue of $770 million to $790 million, down sharply from its prior forecast of $860 million to $880 million.

"As hereditary cancer and other molecular diagnostic testing continues to grow, pressures on reimbursement rates is expected to persist," CEO Samraat Raha told analysts on the earnings call.

According to Raha, this trend prompted the company's new Ascend initiative. Supported by an unnamed "leading professional services firm," the measure targets "meaningful, measurable benefits to profitability" beginning in 2027, the CEO said.

Piper Sandler, however, views these goals with skepticism. The firm believes the quarterly numbers reflect deep-seated structural issues rather than transient headwinds, undermining confidence in the company's ability to achieve sustainable profitability.

Shares have fallen 51% this year, dramatically underperforming the broader market. The stock has long been volatile: Myriad dropped sharply at the end of 2024, exacerbated by a sector-wide downturn in biotechnology stocks. Today, shares remain well below their all-time closing high of $61.27 set in November 2000.

The stock is overwhelmingly Hold-rated among major Wall Street firms, though Piper Sandler and Jefferies both rate it Sell.

The company was famously involved in a landmark Supreme Court ruling in 2013 that barred the patenting of naturally occurring human genes. Consequently, Myriad lost its exclusive commercial right to perform diagnostic testing on the BRCA1 and BRCA2 breast and ovarian cancer genes, allowing competitors to enter the market.

It seems the latest earnings were simply another reminder that whenever one challenge subsides, another emerges.