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

Zacks Equity Research

Illumina (ILMN) closed at $302.29 in the latest trading session, marking a -0.9% move from the prior day. This change lagged the S&P 500's daily gain of 0.02%. Elsewhere, the Dow gained 0.1%, while the tech-heavy Nasdaq added 0.17%.

Heading into today, shares of the genetic testing tools company had lost 10.62% over the past month, lagging the Medical sector's loss of 0.79% and the S&P 500's gain of 4.82% in that time.

ILMN will be looking to display strength as it nears its next earnings release, which is expected to be July 29, 2019. The company is expected to report EPS of $1.36, down 4.9% from the prior-year quarter. Our most recent consensus estimate is calling for quarterly revenue of $890 million, up 7.23% from the year-ago period.

ILMN's full-year Zacks Consensus Estimates are calling for earnings of $6.68 per share and revenue of $3.60 billion. These results would represent year-over-year changes of +16.78% and +8.1%, respectively.

Any recent changes to analyst estimates for ILMN should also be noted by investors. These revisions typically reflect the latest short-term business trends, which can change frequently. As a result, we can interpret positive estimate revisions as a good sign for 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.

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. Over the past month, the Zacks Consensus EPS estimate has moved 0.03% higher. ILMN is currently a Zacks Rank #1 (Strong Buy).

Digging into valuation, ILMN currently has a Forward P/E ratio of 45.65. This represents a premium compared to its industry's average Forward P/E of 23.01.

It is also worth noting that ILMN currently has a PEG ratio of 2.12. 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. ILMN's industry had an average PEG ratio of 1.85 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 53, putting it in the top 21% 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.

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

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