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Here's Why You Should Invest in Illumina (ILMN) Stock Now

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Illumina, Inc. (ILMN - Free Report) continues to register strong top-line growth across its high throughput, mid throughput and low throughput categories.

Over the past year, shares of Illumina have rallied 37.8% against the industry's 6.6% decline and the S&P 500’s 9.9% increase.

This renowned sequencing and array-based genetic analysis solution provider has a market cap of $45.65 billion. The company has an earnings growth rate of 21.5% for the next three to five years.

With solid prospects, this Zacks Rank #2 (Buy) stock is an attractive pick for investors at the moment.

What Makes the Stock an Attractive Pick?

High Prospects in Reproductive and Genetic Health Market

Illumina is currently keeping well with its goals to strengthen foothold in the multi-billion gene sequencing market with some highly competitive products in its existing portfolio and pipeline.

This market is developing rapidly on a global scale which has allowed the company to witness consistent growth in the number of non-invasive prenatal test (NIPT) samples. Within United States, positive NIPT reimbursement trends have been observed.

The company continues to witness increasing average-risk coverage with recent decisions from Florida and Minnesota Medicaid along with Blue Cross Blue Shield Tennessee in North Carolina. This has reached total average risk coverage to 43%. In this regard, during the fourth quarter 2018, the company launched a high-density genotyping array, the Infinium Global Diversity Array. The array was developed for the All of Us Research Program which is one of the country’s most ambitious biomedical research efforts. Outside the United States as well, the rate of NIPT adoption is high.

Growth in Oncology Space

Lately, Illumina has adopted a strategy to deliver market-leading technologies and tailored solutions that will enable customers to personalize patient care through genomics. The company is seeing a rise in the number of liquid biopsy and clinical commercial customers. In 2018, the NovaSeq platform demonstrated strong momentum on solid performance by the S1, S2 and S4 flow cells.

Riding on NovaSeq platform strength, the company recorded sequencing system revenues of $159 million in the fourth quarter, a new quarterly record for Illumina. While the HiSeq replacement cycle is under process, the company is optimistic to note that majority of HiSeq and HiSeq X customers have placed NovaSeq orders.

Focus on Geographic Expansion

Apart from North America, Illumina markets and distributes products to customers in Europe, Latin America, and the Asia-Pacific region, either through its direct selling force or through distributors that specialize in life science products.

In the fourth quarter, Illumina witnessed impressive growth in the Asia-Pacific region buoyed by 28% sequencing growth (adjusting for the tariff impact) in Greater China. Obviously, among the emerging markets, China currently offers the maximum scope for growth to Illumina.

Which Way Are Estimates Heading?

For the current quarter, the Zacks Consensus Estimate for earnings is pegged at $1.34. The same for revenues stands at $833 million, mirroring a year-over-year improvement of 6.5%.

For 2019, the Zacks Consensus Estimate for earnings is pinned at $6.53, reflecting 14.2% year-over-year growth. The same for revenues is pegged at $3.77 billion.

Other Key Picks

Other top-ranked stocks in the broader medical space are Penumbra, Inc. (PEN - Free Report) , Amedisys, Inc. (AMED - Free Report) and ResMed Inc. (RMD - Free Report) .

Penumbra’s long-term earnings growth rate is expected at 20.9%. The stock carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Amedisys’ long-term earnings growth rate is projected at 19.8%. The stock carries a Zacks Rank #2.

ResMed’s long-term earnings growth rate is estimated at 10.6%. The stock also carries a Zacks Rank of 2.

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