Here's Why You Should Invest in Illumina (ILMN) Stock Now
Illumina, Inc. ILMN has been gaining investor confidence on consistently positive results. Over the past year, the company’s share price has outperformed its industry. The stock has gained 73.5% against the industry’s 9.2% fall. Also, the company has outperformed the S&P 500’s 17.6% gain.
This renowned sequencing and array-based genetic analysis solution provider has a market cap of $48.72 billion. The company has an earnings growth rate of 22.1% for the next three to five years.
With solid prospects, this Zacks Rank #1 (Strong Buy) stock is an attractive pick for investors at the moment.
The company’s estimate revision trend for the current year has been positive. In the past 30 days, 10 analysts revised their estimates upward with no movement in the opposite direction. Resultantly, earnings estimates rose around 0.2% to $4.88.
Let’s find out whether the recent positive trend is a sustainable one.
Solid Quarterly Performance
Illumina exited the second quarter of 2018 on a solid note with better-than-expected earnings and revenues. We are also encouraged by the significant year-over-year growth in both the counts. Additionally, improving margins buoy optimism. Further, the company’s raised 2018 guidance indicates that the company will deliver solid results in the quarters to come.
Reproductive and Genetic Health Prospects Bright
Illumina is currently keeping with its goals to strengthen foothold in the multi-billion gene sequencing market with some highly competitive products in its existing portfolio and pipeline. For market expansion, the company’s primary focus is on the reproductive and genetic health space, which it seeks to expand with the verifi laboratory-developed non-invasive prenatal test (NIPT).
This market is developing rapidly on a global scale which has allowed the company to witness consistent growth in the number of NIPT samples. Within the United States, NIPT reimbursement trends have been positive. Outside the United States as well, the rate of NIPT adoption is high.
Geographic Expansion Efforts Bode Well
Apart from North America, Illumina markets and distributes its products directly to customers in Europe, Latin America, and the Asia-Pacific region (APAC) either through its direct selling force or distributors that specialize in life science products.
In the second quarter, Illumina witnessed 32% growth in the Asia-Pacific region propelled by 42% shipment growth in Greater China. Also, revenues from Europe, Middle East and Africa have risen strongly.
Strategic Pacts to Strengthen Business
In May 2018, Illumina announced the acquisition of Edico Genome to strengthen the next-generation sequencing (NGS) platform. Edico Genome’s DRAGEN Bio-IT (DRAGEN) platform pairs well with Illumina’s sequencing portfolio and helps in delivering rapid and streamlined output for NGS customers.
Other Key Picks
Other top-ranked stocks in the broader medical space are Intuitive Surgical ISRG , Integer Holdings Corp. ITGR and Masimo Corp. MASI .
Integer Holdings has an expected long-term earnings growth rate of 15%. The stock flaunts a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Intuitive Surgical’s expected long-term earnings growth rate is 14.7%. The stock carries a Zacks Rank #2 (Buy).
Masimo’s long-term earnings growth rate is projected at 14.8%. The stock carries a Zacks Rank #2.
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