Myriad Genetics Inc. (NASDAQ: MYGN) missed on its earnings expectations and issued guidance that was very disappointing. Its shares closed down 1.8% at $29.46 before the news, but shares opened down at $21.15 on Wednesday. To make matters worse, the drop was even worse after the open as shares were down 29.4% at $20.79 after the first 20 minutes of trading.

24/7 Wall St. could not help but notice how many analysts on Wall Street have simply abandoned their old upside hopes for Myriad. The trading volume of 3.8 million shares in the first 20 minutes was already almost four times higher than what is seen on a normal trading day.

Myriad reported $186 million in revenue and $0.32 in earnings per share. These were under estimates by about $2 million in sales and six cents on earnings. Myriad’s miss was almost entirely attributable to lower than expected myRisk Hereditary Cancer Testing (HCT) sales, which was due to pricing pressure and market share loss.

The big part of the disappointment here is that the 2017 sales and earnings guidance were roughly 11% and 30%, respectively, short of consensus expectations. Gross margin declined 170 basis points (still at 78.5%) and operating margin was down about 400 basis points to 19%.

Barclays downgraded Myriad to Equal Weight from Overweight, and the firm’s price target was cut by more than half to $24 from $50. Piper Jaffray downgraded Myriad to Neutral from Overweight and slashed its target in more than half to $22 from $47.

Merrill Lynch already had an Underperform rating for Myriad Genetics, but it lowered the price objective to $20 from $25. Its investment rationale said:

We are wary of the company’s large position in HCT (85% of sales) given the potential for pricing erosion over the next several years as long-term contracts roll, reference labs and lower-priced competitors gain traction with private payors and technology continues to improve lowering the competitive moat. We expect Myriad’s new pipeline products to largely offset the lost HCT revenues but at lower margins. We believe that HCT pricing pressure will limit profitability and cash flow generation.

Gabelli downgraded Myriad Genetics to Hold from Buy, and its target was lowered to $32 from $46. Wells Fargo also downgraded Myriad Genetics to Market Perform from Outperform.

Other analyst cuts seen were as follows:

• Mizuho maintained a Neutral rating but slashed the target price to $22 from $34.
• Cowen maintained its Market Perform rating and lowered its price target to $20 from $32.
• Goldman Sachs lowered its price target to $24 from $39.
• UBS lowered its price target from $33 to $18.

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Myriad Genetics shares were last seen down 29.4% at $20.79, and the volume of 5.1 million shares in the first 40 minutes was already nearing six times normal trading volume.

Its short interest as of July 29 was 16.687 million shares, down from 17.46 million in mid-July. That same short interest had been well over 20 million shares throughout much of 2015.

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