Want to participate in a short research study? Help shape the future of investing tools and you could win a $250 gift card!
Since Illumina, Inc. (NASDAQ:ILMN) released its earnings in March 2019, analyst forecasts seem fairly subdued, with profits predicted to rise by 16% next year compared with the higher past 5-year average growth rate of 21%. Presently, with latest-twelve-month earnings at US$826m, we should see this growing to US$961m by 2020. I will provide a brief commentary around the figures and analyst expectations in the near term. Readers that are interested in understanding the company beyond these figures should research its fundamentals here.
Exciting times ahead?
Over the next three years, it seems the consensus view of the 15 analysts covering ILMN is skewed towards the positive sentiment. Generally, broker analysts tend to make predictions for up to three years given the lack of visibility beyond this point. To reduce the year-on-year volatility of analyst earnings forecast, I've inserted a line of best fit through the expected earnings figures to determine the annual growth rate from the slope of the line.
By 2022, ILMN's earnings should reach US$1.4b, from current levels of US$826m, resulting in an annual growth rate of 18%. This leads to an EPS of $9.86 in the final year of projections relative to the current EPS of $5.62. With a current profit margin of 25%, this movement will result in a margin of 28% by 2022.
Future outlook is only one aspect when you're building an investment case for a stock. For Illumina, I've compiled three fundamental factors you should further examine:
- Financial Health: Does it have a healthy balance sheet? Take a look at our free balance sheet analysis with six simple checks on key factors like leverage and risk.
- Valuation: What is Illumina worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether Illumina is currently mispriced by the market.
- Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Illumina? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.