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Illumina (ILMN) Gains But Lags Market: What You Should Know

·3-min read

In the latest trading session, Illumina (ILMN) closed at $193.93, marking a +0.2% move from the previous day. This change lagged the S&P 500's 3.06% gain on the day. Elsewhere, the Dow gained 2.68%, while the tech-heavy Nasdaq lost 0.09%.

Prior to today's trading, shares of the genetic testing tools company had lost 20.54% over the past month. This has lagged the Medical sector's loss of 2.37% and the S&P 500's loss of 4.31% in that time.

Illumina will be looking to display strength as it nears its next earnings release. In that report, analysts expect Illumina to post earnings of $0.63 per share. This would mark a year-over-year decline of 66.31%. Meanwhile, our latest consensus estimate is calling for revenue of $1.22 billion, up 8.27% from the prior-year quarter.

For the full year, our Zacks Consensus Estimates are projecting earnings of $4.10 per share and revenue of $5.2 billion, which would represent changes of -30.51% and +14.92%, respectively, from the prior year.

Any recent changes to analyst estimates for Illumina should also be noted by investors. These revisions help to show the ever-changing nature of near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate remained stagnant. Illumina is currently sporting a Zacks Rank of #3 (Hold).

Digging into valuation, Illumina currently has a Forward P/E ratio of 47.26. Its industry sports an average Forward P/E of 21.22, so we one might conclude that Illumina is trading at a premium comparatively.

We can also see that ILMN currently has a PEG ratio of 1.52. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. ILMN's industry had an average PEG ratio of 1.11 as of yesterday's close.

The Medical - Biomedical and Genetics industry is part of the Medical sector. This industry currently has a Zacks Industry Rank of 103, which puts it in the top 41% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on Zacks.com.


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