We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Here's Why You Should Retain Illumina (ILMN) Stock for Now
Read MoreHide Full Article
Illumina, Inc. (ILMN - Free Report) is well poised for growth in the coming quarters, owing to strength in the genomics market and its potential role in healthcare and personalized medicines, particularly in the oncology space. A healthy pipeline of new products provides Illumina with a competitive advantage. However, macroeconomic pressure and stiff competition raise apprehension.
In the past year, the Zacks Rank #3 (Hold) stock has declined 29.3% compared with the 15% fall of the industry and the 24.7% rise of the S&P 500.
The renowned life sciences company, which provides tools and integrated systems for the analysis of genetic variation and function, has a market capitalization of $22.63 billion. Its first-quarter 2023 earnings per share surpassed the Zacks Consensus Estimate by 153.9%.
Let’s delve deeper.
Factors at play
Reproductive and Genetic Health Market Prospect High: Illumina is currently keeping well with its goals to strengthen its foothold in the multi-billion dollar gene sequencing worldwide market with some highly competitive products in its existing portfolio and pipeline. The market adoption of the NGS technology is also accelerating the research for rare and undiagnosed diseases to discover the genetic causes of inherited disorders by assessing many genes simultaneously.
In the third quarter of 2023, clinical sequencing consumables grew 10% year over year, led by continued momentum in oncology and genetic disease testing. Illumina opened a new office and state-of-the-art Solutions Center in Bengaluru, India, to grow the genomics market in the most populous country in the world, unlocking opportunities for advancing health care and combating the effects of climate change in South Asia.
Sequencing Growth Continues: The NovaSeq X launch has further strengthened Illumina's competitive position in high-throughput sequencing. The sophisticated platform includes the most comprehensive end-to-end software the company has released to date. The strong global interest in the NovaSeq X series has led to its rollout occurring at a strong magnitude and pace.
Image Source: Zacks Investment Research
During the third quarter, Illumina saw encouraging trends across both its research and clinical high-throughput customers that have a NovaSeq X installed. On both a quarter-over-quarter and a year-over-year basis, these customers have shown higher overall growth in sequencing output than high-throughput customers who have not yet adopted the NovaSeq X. The company exited the quarter with more than 310 orders since launch, with the total installed base being 273 instruments.
Favorable Solvency: At the end of the third quarter of 2023, Illumina reported cash and cash equivalents plus short-term investments of $933 million, while short-term obligations remained nil. This is reflective of a sound financial position. The long-term debt of the company totaled $1.49 billion, up by 0.1% on a sequential basis. The total debt-to-total capital ratio stood at 20.2% at the third-quarter end, better than the industry’s 55.3%.
Downsides
Macroeconomic Pressures Remain a Concern: The current macroeconomic scenario, including the armed conflict between Russia and Ukraine, which began in 2022, and the sanctions imposed by the United States and other countries, have impacted the company’s ability to ship products to affected regions and customers. Furthermore, the slowdown of COVID-19 surveillance and macroeconomic factors, such as inflation, exchange rates and competitive challenges in China region, have impacted Illumina’s business performance and customers’ behavior. In the near term, management does not expect these headwinds to lessen.
Tough Competition: Illumina faces significant competition in the sequencing, SNP genotyping, gene expression and molecular diagnostics markets with several large players already enjoying significant market share, intellectual property portfolios and regulatory expertise. Such companies include the likes of Agilent Technologies, Pacific Biosciences of California, BGI, QIAGEN N.V., Roche Holding A.G. and Thermo Fisher Scientific, among others.
Estimate Trends
In the past 30 days, the Zacks Consensus Estimate for Illumina’s 2023 earnings has been constant at $1.73.
The Zacks Consensus Estimate for 2023 revenues is pegged at $4.49 billion, suggesting a 2.1% fall from the year-ago reported number.
Haemonetics’ shares have increased 11.6% in the past year. Earnings estimates for Haemonetics have increased from $3.82 to $3.86 in 2023 and $4.07 to $4.11 in 2024 in the past 30 days.
HAE’s earnings beat estimates in each of the trailing four quarters, delivering an average surprise of 16.1%. In the last reported quarter, it posted an earnings surprise of 5.3%.
Estimates for Insulet’s 2023 earnings per share have increased from $1.61 to $1.90 in the past 30 days.
PODD’s earnings surpassed estimates in all the trailing four quarters, the average surprise being 105.1%. In the last reported quarter, it delivered an average earnings surprise of 77.4%.
Estimates for DexCom’s 2023 earnings per share have increased from $1.23 to $1.41 in the past 30 days.
DXCM’s earnings surpassed estimates in all the trailing four quarters, the average surprise being 36.4%. In the last reported quarter, it delivered an average earnings surprise of 47.1%.
Unique Zacks Analysis of Your Chosen Ticker
Pick one free report - opportunity may be withdrawn at any time
Image: Shutterstock
Here's Why You Should Retain Illumina (ILMN) Stock for Now
Illumina, Inc. (ILMN - Free Report) is well poised for growth in the coming quarters, owing to strength in the genomics market and its potential role in healthcare and personalized medicines, particularly in the oncology space. A healthy pipeline of new products provides Illumina with a competitive advantage. However, macroeconomic pressure and stiff competition raise apprehension.
In the past year, the Zacks Rank #3 (Hold) stock has declined 29.3% compared with the 15% fall of the industry and the 24.7% rise of the S&P 500.
The renowned life sciences company, which provides tools and integrated systems for the analysis of genetic variation and function, has a market capitalization of $22.63 billion. Its first-quarter 2023 earnings per share surpassed the Zacks Consensus Estimate by 153.9%.
Let’s delve deeper.
Factors at play
Reproductive and Genetic Health Market Prospect High: Illumina is currently keeping well with its goals to strengthen its foothold in the multi-billion dollar gene sequencing worldwide market with some highly competitive products in its existing portfolio and pipeline. The market adoption of the NGS technology is also accelerating the research for rare and undiagnosed diseases to discover the genetic causes of inherited disorders by assessing many genes simultaneously.
In the third quarter of 2023, clinical sequencing consumables grew 10% year over year, led by continued momentum in oncology and genetic disease testing. Illumina opened a new office and state-of-the-art Solutions Center in Bengaluru, India, to grow the genomics market in the most populous country in the world, unlocking opportunities for advancing health care and combating the effects of climate change in South Asia.
Sequencing Growth Continues: The NovaSeq X launch has further strengthened Illumina's competitive position in high-throughput sequencing. The sophisticated platform includes the most comprehensive end-to-end software the company has released to date. The strong global interest in the NovaSeq X series has led to its rollout occurring at a strong magnitude and pace.
During the third quarter, Illumina saw encouraging trends across both its research and clinical high-throughput customers that have a NovaSeq X installed. On both a quarter-over-quarter and a year-over-year basis, these customers have shown higher overall growth in sequencing output than high-throughput customers who have not yet adopted the NovaSeq X. The company exited the quarter with more than 310 orders since launch, with the total installed base being 273 instruments.
Favorable Solvency: At the end of the third quarter of 2023, Illumina reported cash and cash equivalents plus short-term investments of $933 million, while short-term obligations remained nil. This is reflective of a sound financial position. The long-term debt of the company totaled $1.49 billion, up by 0.1% on a sequential basis. The total debt-to-total capital ratio stood at 20.2% at the third-quarter end, better than the industry’s 55.3%.
Downsides
Macroeconomic Pressures Remain a Concern: The current macroeconomic scenario, including the armed conflict between Russia and Ukraine, which began in 2022, and the sanctions imposed by the United States and other countries, have impacted the company’s ability to ship products to affected regions and customers. Furthermore, the slowdown of COVID-19 surveillance and macroeconomic factors, such as inflation, exchange rates and competitive challenges in China region, have impacted Illumina’s business performance and customers’ behavior. In the near term, management does not expect these headwinds to lessen.
Tough Competition: Illumina faces significant competition in the sequencing, SNP genotyping, gene expression and molecular diagnostics markets with several large players already enjoying significant market share, intellectual property portfolios and regulatory expertise. Such companies include the likes of Agilent Technologies, Pacific Biosciences of California, BGI, QIAGEN N.V., Roche Holding A.G. and Thermo Fisher Scientific, among others.
Estimate Trends
In the past 30 days, the Zacks Consensus Estimate for Illumina’s 2023 earnings has been constant at $1.73.
The Zacks Consensus Estimate for 2023 revenues is pegged at $4.49 billion, suggesting a 2.1% fall from the year-ago reported number.
Key Picks
Some better-ranked stocks in the broader medical space are Haemonetics (HAE - Free Report) , Insulet (PODD - Free Report) and DexCom (DXCM - Free Report) . While Haemonetics and DexCom each carry a Zacks Rank #2 (Buy), Insulet sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Haemonetics’ shares have increased 11.6% in the past year. Earnings estimates for Haemonetics have increased from $3.82 to $3.86 in 2023 and $4.07 to $4.11 in 2024 in the past 30 days.
HAE’s earnings beat estimates in each of the trailing four quarters, delivering an average surprise of 16.1%. In the last reported quarter, it posted an earnings surprise of 5.3%.
Estimates for Insulet’s 2023 earnings per share have increased from $1.61 to $1.90 in the past 30 days.
PODD’s earnings surpassed estimates in all the trailing four quarters, the average surprise being 105.1%. In the last reported quarter, it delivered an average earnings surprise of 77.4%.
Estimates for DexCom’s 2023 earnings per share have increased from $1.23 to $1.41 in the past 30 days.
DXCM’s earnings surpassed estimates in all the trailing four quarters, the average surprise being 36.4%. In the last reported quarter, it delivered an average earnings surprise of 47.1%.