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

Zacks Equity Research
Wyndham (WYND) doesn't possess the right combination of the two key ingredients for a likely earnings beat in its upcoming report. Get prepared with the key expectations.

Illumina (ILMN) closed the most recent trading day at $347.53, moving -1.02% from the previous trading session. This change lagged the S&P 500's 0.97% gain on the day. Elsewhere, the Dow gained 1.35%, while the tech-heavy Nasdaq added 1.39%.

Prior to today's trading, shares of the genetic testing tools company had gained 16.81% over the past month. This has outpaced the Medical sector's gain of 3.17% and the S&P 500's gain of 0.64% in that time.

Investors will be hoping for strength from ILMN as it approaches its next earnings release. In that report, analysts expect ILMN to post earnings of $1.40 per share. This would mark a year-over-year decline of 2.1%. Meanwhile, our latest consensus estimate is calling for revenue of $886.93 million, up 6.86% from the prior-year quarter.

ILMN's full-year Zacks Consensus Estimates are calling for earnings of $6.68 per share and revenue of $3.76 billion. These results would represent year-over-year changes of +16.78% and +12.84%, respectively.

Any recent changes to analyst estimates for ILMN should also be noted by investors. These recent revisions tend to reflect the evolving nature of short-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

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 holding a Zacks Rank of #2 (Buy) right now.

Digging into valuation, ILMN currently has a Forward P/E ratio of 52.56. For comparison, its industry has an average Forward P/E of 23.04, which means ILMN is trading at a premium to the group.

Meanwhile, ILMN's PEG ratio is currently 2.44. 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 1.78 as of yesterday's close.

The Medical - Biomedical and Genetics industry is part of the Medical sector. This group has a Zacks Industry Rank of 78, putting it in the top 31% 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.

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

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