Illumina, Inc. (ILMN - Free Report) has been gaining investor confidence on consistently positive results. Over the past year, the company’s share price has outperformed its industry. The stock has gained 25.5% against the industry’s 19.7% fall. Also, the company has outperformed the S&P 500’s 6.7% decline.
This renowned sequencing and array-based genetic analysis solution provider has a market cap of $45.14 billion. The company has an earnings growth rate of 23.4% 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.
Per our Style Score, Illumina has Growth Score of B, which is reflective of the company’s solid prospects. Our research shows that stocks with a Growth Style Score of A or B combined with a Zacks Rank #1 (Strong Buy) or 2 offer the best upside potential.
What Makes the Stock an Attractive Pick?
Strategic Partnerships to Strengthen Business
We are optimistic about Illumina’s expansion strategy through the enhancement of its portfolio of sequencing products, and the development of strategic partnerships with therapeutics and diagnostic services providers. For instance, within clinical markets, Extended RAS companion diagnostic kit was developed by Illumina in partnership with Amgen Inc. (AMGN - Free Report) to identify patients eligible for treatment of metastatic colorectal cancer with Vectibix.
In May 2018, Illumina announced the acquisition of Edico Genome to strengthen the next-generation sequencing (NGS) platform. The acquisition is expected to help Illumina provide an enhanced data analysis experience to NGS users along with an expanded customer base.
Several Developments to Add Value
Illumina’s product launches continue to contribute to the top line. The company recently broadened its genotyping sequencing line. For National Institutes of Health's (NIH) new All of Us Research Program, the company has launched a high-density genotyping array, the Infinium Global Diversity Array.
In addition to this, the awarded genome centers will employ Illumina’s NovaSeq 6000 Sequencing Platform to conduct the whole genome sequencing for the All of Us Research Program.
It also received Chinese regulatory approval for its NGS system — MiSeqDx. This is Illumina’s first NGS system to be approved by the National Medical Products Administration in China.
Geographic Expansion Efforts Bode Well
Apart from North America, Illumina markets and distributes products directly to customers in Europe, Latin America, and the Asia-Pacific region (APAC) either through its direct selling force or distributors that specialize in life science products.
In the third quarter, Illumina witnessed impressive growth in the Asia-Pacific region propelled by 17% shipment growth in Greater China. Also, revenues from Europe, Middle East and Africa have risen strongly.
Which Way Are Estimates Heading?
For the current quarter, the Zacks Consensus Estimate for earnings is pegged at $1.36. The same for revenues stands at $863.09 million, mirroring a year-over-year improvement of 10.9%.
For 2018, the Zacks Consensus Estimate for earnings is pinned at $5.76, reflecting 44% year-over-year growth. The same for revenues is pegged at $3.33 billion.
Other Key Picks
Other top-ranked stocks in the broader medical space are Veeva Systems (VEEV - Free Report) and Amedisys, Inc. (AMED - Free Report) .
Veeva Systems’ long-term earnings growth rate is estimated at 19.5%. The stock flaunts a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Amedisys’ long-term earnings growth rate is projected at 18.8%. The stock carries a Zacks Rank of 1.
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