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

Zacks Equity Research
Updated

Illumina, Inc. ILMN has been gaining investor confidence on consistently positive results. Over the past year, the company’s share price has outperformed the broader industry

. The stock has gained 60.9%, in comparison to the broader industry’s 1.2% gain. Also, the company has outperformed the S&P 500’s 18.3% gain.

This renowned sequencing and array-based genetic analysis solutions provider has a market cap of $30.78 billion. The company has an earnings growth rate of 16.2% 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.

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The company’s estimate revision trend for the current year has been positive. In the past 60 days, 12 analysts revised their estimates upward with no movement in the opposite direction. Resultantly, earnings estimates rose around 2.7% to $3.75.

Let’s find out whether the recent positive trend is a sustainable one.

Illumina has been delivering solid quarterly results of late. Post a promising third quarter, we expect Illumina to maintain growth momentum on continued uptake of sequencing consumables, instruments and microarray offerings.

We are upbeat about Illumina’s latest product launches. In the last reported quarter, growth was fueled by strong adoption of VeriSeq NIPT, a CE-IVD marked NGS solution in Europe. Moreover, the NovaSeq platform continued to drive growth with close to 200 NovaSeq systems being delivered since the launch in January 2017. Also, around 80 orders were shipped in the third quarter.

In November, Illumina introduced its second FDA-regulated and CE-IVD marked next-generation sequencing (NGS) system — NextSeq 550Dx. The company also announced that the intended use for the MiSeqDx instrument (the first FDA regulated NGS sequencer) has been extended to include the use of DNA libraries generated from formalin-fixed paraffin embedded (FFPE) tissues.

Also, in October, Illumina announced the availability of the NovaSeq S4 flow cell and reagent kit for its NovaSeq 6000 System. Moreover, in the same month, Illumina announced the availability of Nextera DNA Flex — a whole genome sequencing (WGS) library prep product. Per management, these developments should boost demand for the NovaSeq platform.

Illumina now has a solid diagnostic NGS portfolio, courtesy of its NextSeq 550Dx and the MiSeqDx products. The company is capable of meeting any clinical requirement for NGS-based in vitro diagnostic (IVD) products.

We are also upbeat about positive NIPT reimbursement trends globally as well as in the United States. The Netherlands and Denmark have started covering the VeriSeq NIPT CE-IVD test since the first quarter, followed by England and France. The company continues to see positive reimbursement trends in Europe as well.

Illumina’s efforts to drive growth internationally also buoy optimism. Apart from North America, the company markets and distributes products directly to customers in Europe, Latin America and the Asia-Pacific region (APAC) either through its direct selling force or through distributors that specialize in life science products.

We are also 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. In August 2017, Illumina partnered with Telegraph Hill Partners to set up an independent company Verogen, Inc. The newly-established entity is expected to strengthen Illumina’s NGS business in the forensic genomics market.

Other Key Picks

Other top-ranked medical stocks are PetMed Express, Inc. PETS, Align Technology, Inc. ALGN and Luminex Corporation LMNX. Notably, PetMed and Align Technology sport a Zacks Rank #1 (Strong Buy), while Luminex carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

PetMed has a long-term expected earnings growth rate of 10%. The stock has rallied roughly 94.5% over a year.

Align Technology has a long-term expected earnings growth rate of 28.9%. The stock has gained 131.2% in a year.

Luminex has a long-term expected earnings growth rate of 16.3%. The stock has gained 2.8% over the past three months.

Investor Alert: Breakthroughs Pending

A medical advance is now at the flashpoint between theory and realization. Billions of dollars in research have poured into it. Companies are already generating substantial revenue, and even more wondrous products are in the pipeline.

Cures for a variety of deadly diseases are in sight, and so are big potential profits for early investors. Zacks names 5 stocks to buy now.

Click here to see them >>


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Align Technology, Inc. (ALGN) : Free Stock Analysis Report
 
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