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Illumina (ILMN) Gains As Market Dips: What You Should Know

Zacks Equity Research

In the latest trading session, Illumina (ILMN) closed at $300.91, marking a +1.14% move from the previous day. This move outpaced the S&P 500's daily loss of 0.07%. At the same time, the Dow added 0.14%, and the tech-heavy Nasdaq lost 0.22%.

Coming into today, shares of the genetic testing tools company had gained 4.48% in the past month. In that same time, the Medical sector gained 0.45%, while the S&P 500 gained 4.58%.

ILMN will be looking to display strength as it nears its next earnings release. The company is expected to report EPS of $1.40, down 8.14% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $871.64 million, up 2.19% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $6.05 per share and revenue of $3.53 billion. These totals would mark changes of +5.7% and +5.97%, respectively, from last year.

Investors should also note any recent changes to analyst estimates for ILMN. Recent revisions tend to reflect the latest near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 0.05% higher. ILMN is currently a Zacks Rank #3 (Hold).

Digging into valuation, ILMN currently has a Forward P/E ratio of 49.21. Its industry sports an average Forward P/E of 24.37, so we one might conclude that ILMN is trading at a premium comparatively.

It is also worth noting that ILMN currently has a PEG ratio of 2.77. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. The Medical - Biomedical and Genetics industry currently had an average PEG ratio of 1.69 as of yesterday's close.

The Medical - Biomedical and Genetics industry is part of the Medical sector. This industry currently has a Zacks Industry Rank of 90, which puts it in the top 36% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

To follow ILMN in the coming trading sessions, be sure to utilize Zacks.com.


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