Stock (Symbol) |
Illumina (ILMN) |
Stock Price |
$138 |
Sector |
| Healthcare |
Data is as of |
| June 30, 2016 |
Expected to Report |
| Jul 19 – Jul 25 |
Company Description |
 ILMN offers integrated systems, consumables and analysis tools for genetic analysis. It also manufactures sequencing and array platforms, reagent kits and scanning equipment. Its customers include genomic research centers, academic institutions, government laboratories, hospitals and reference laboratories, pharmaceutical, biotechnology, agrigenomics, commercial molecular diagnostic and consumer genomics companies. Its sequencing instruments perform a range of nucleic-acid analyses across a range of sample sizes. Its products and services are used for basic analysis and research, including de novo sequencing, genetic variation analysis, epigenetics and targeted screening, among others. It also provides products and services for other life sciences applied markets, such as agrigenomics. It also offers Clarity Run Manager, Clarity LIMS Silver and Clarity LIMS Gold. Source: Thomson Financial |
Sharek’s Take |
 Has Illumina (ILMN) lost its magic touch? Illumina used to be the king of gene sequencing, developing state of the art machines while also lowering the prices of its older units. I previously wrote: It has a stranglehold on its market that it should be able to keep as far as I can see. The company is even developing a medical device that can detect cancer (though ILMN might spin that off into a separate company). The stock used to carry a 60+ P/E which was around double its profit growth rate. Now Illumina is having trouble. It’s been missing estimates, guiding lower, and posting poor profit growth (or negative growth) for three qtrs now. During the last 4 qtrs ILMN has had 2016 estimates tumble from $4.12 to $3.38 — ugh. What’s makes things worse is when you have poor results with a 60+ P/E — that’s a recipe for a big stock drop. And it has, as the stock was over $200 for much of 2015 and is now $138. Still, the stock has a P/E of 41, and with negative profit growth you have to be confident the company is on the comeback trail before buying in. I am not. Nor is Jim Cramer, who has said he likes Thermo Fisher (TMO) better. One good thing about ILMN is it’s got a lot of support here in the $130s, but I’m gonna pass on buying here. |
One Year Chart |
 Terrible looking one-year chart, and profit growth has been on a slide in each of the last 4 qtrs. Last qtr ILMN had $0.71 in profits — and estimate which was lowered by $0.01, then $0.11, then $0.10 in previous qtrs and ILMN still missed by $0.08. Qtrly and annual estimates also fell — for the 3rd straight qtr. Qtrly profit Estimates are -9%, 11%, 28% and 27% but must be taken with a grain of salt. Or a dash. |
Fair Value |
 I’m pegging ILMN’s Fair Value at 35x earnings, but keep in mind these estimates have been in decline, and if that continues my Fair Values will fall as well. |
Bottom Line |
 Illumina went on a tear higher from 2013 through July 2015, but since then has been in a decline. I still feel this company has great technology and gene sequencing has growth opportunity. But right now this stock is stuck in a rut and I’m not going to assume things will turn around anytime soon. ILMN remains on my radar for growth investors. |
Power Rankings |
Growth Stock Portfolio
N/AAggressive Growth Portfolio N/AConservative Stock Portfolio N/A |
