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

Zacks Equity Research

Illumina (ILMN) closed at $358.08 in the latest trading session, marking a +0.1% move from the prior day. The stock outpaced the S&P 500's daily loss of 0.95%. Elsewhere, the Dow lost 0.67%, while the tech-heavy Nasdaq lost 1.51%.

Coming into today, shares of the genetic testing tools company had gained 14.49% in the past month. In that same time, the Medical sector gained 3.89%, while the S&P 500 gained 4.32%.

Wall Street will be looking for positivity from ILMN as it approaches its next earnings report date. The company is expected to report EPS of $1.40, down 2.1% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $886.93 million, up 6.86% from the prior-year quarter.

For the full year, our Zacks Consensus Estimates are projecting earnings of $6.68 per share and revenue of $3.76 billion, which would represent changes of +16.78% and +12.84%, respectively, from the prior year.

Investors might also notice recent changes to analyst estimates for ILMN. Recent revisions tend to reflect the latest near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection remained stagnant. ILMN is currently a Zacks Rank #2 (Buy).

Valuation is also important, so investors should note that ILMN has a Forward P/E ratio of 53.55 right now. For comparison, its industry has an average Forward P/E of 23.53, which means ILMN is trading at a premium to the group.

It is also worth noting that ILMN currently has a PEG ratio of 2.49. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. The Medical - Biomedical and Genetics was holding an average PEG ratio of 2.03 at yesterday's closing price.

The Medical - Biomedical and Genetics industry is part of the Medical sector. This group has a Zacks Industry Rank of 74, putting it in the top 29% 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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