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

Zacks Equity Research

Illumina (ILMN) closed the most recent trading day at $281.62, moving -1.19% from the previous trading session. This move lagged the S&P 500's daily gain of 0.66%. At the same time, the Dow added 1%, and the tech-heavy Nasdaq gained 0.38%.

Prior to today's trading, shares of the genetic testing tools company had lost 4.98% over the past month. This has lagged the Medical sector's loss of 3.19% and was narrower than the S&P 500's loss of 5.01% in that time.

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 $1.41, down 7.24% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $870.91 million, up 2.1% from the prior-year quarter.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $6.04 per share and revenue of $3.52 billion. These totals would mark changes of +5.59% and +5.64%, respectively, from last year.

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

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. 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. The Zacks Consensus EPS estimate has moved 4.61% lower within the past month. ILMN is currently sporting a Zacks Rank of #4 (Sell).

Valuation is also important, so investors should note that ILMN has a Forward P/E ratio of 47.16 right now. For comparison, its industry has an average Forward P/E of 27.03, which means ILMN is trading at a premium to the group.

It is also worth noting that ILMN currently has a PEG ratio of 2.66. 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 industry currently had an average PEG ratio of 1.74 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 92, which puts it in the top 36% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on Zacks.com.


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