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Illumina Q2 Preview: 8th Consecutive EPS Beat in Store?

·3-min read

The general market’s performance over the last month has been incredible. However, one sector that has lagged is the Zacks Medical Sector, down nearly 3%. Below is a table illustrating the sector’s performance vs. the S&P 500 over several timeframes.

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Zacks Investment Research


Image Source: Zacks Investment Research

Illumina ILMN, a company within the sector, is scheduled to release Q2 2022 results on Thursday, August 11th, after market close.

Under Illumina’s proprietary technologies, the company provides innovative sequencing and array-based solutions for genotyping, copy number variation analysis, methylation studies, and gene expression profiling of DNA and RNA.

In addition, the company sports a Zacks Rank #2 (Buy) with an overall VGM Score of a D.

Let’s see how the medical giant stacks up heading into the print.

Share Performance & Valuation

It’s been a tough stretch for Illumina shares in 2022, down nearly 40% and coming nowhere near the general market’s performance. Sellers have remained in complete control.

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Zacks Investment Research


Image Source: Zacks Investment Research

However, the picture is vividly different over the last month, where ILMN shares have tacked on a stellar 19% and crushed the S&P 500’s 7% gain.

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Zacks Investment Research


Image Source: Zacks Investment Research

Illumina shares trade at steep valuation multiples. The company’s 52.5X forward earnings multiple is undoubtedly on the extreme side, but it is below its five-year median of 57.3X. Still, shares trade at a rich 138% premium relative to its Zacks Medical Sector.

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Zacks Investment Research


Image Source: Zacks Investment Research

Quarterly Estimates

Zero analysts have revised their quarterly estimates over the last 60 days. In addition, the Zacks Consensus EPS Estimate of $0.63 reflects a steep 66% year-over-year decline in earnings.

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Zacks Investment Research


Image Source: Zacks Investment Research

However, the company’s top-line appears to be in much better shape – Illumina is forecasted to have generated $1.2 billion in revenue throughout the quarter, penciling in a rock-solid 8.3% year-over-year uptick.

Quarterly Performance & Market Reactions

Illumina’s bottom-line results have been stellar; the company has chained together seven consecutive EPS beats. Just in its latest quarter, ILMN registered a solid 23% bottom-line beat.

Top-line results have been just as remarkable, with Illumina recording nine top-line beats over its last ten quarterly reports. Below is a chart illustrating the company’s revenue on a quarterly basis.

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Zacks Investment Research


Image Source: Zacks Investment Research

Day-traders who prefer the long side beware – shares have moved down following the company’s quarterly report in five consecutive quarters.

Putting Everything Together

Illumina shares are deep in the red year-to-date, but over the last month, buyers have finally reappeared, driving the stock price up notably. Still, shares trade at steep valuation multiples.

The company’s bottom-line is projected to decrease significantly, but the top-line looks to register solid growth. In addition, zero analysts have revised their quarterly estimates over the last 60 days.

Furthermore, Illumina has consistently reported quarterly results above expectations. Heading into the print, Illumina ILMN carries a Zacks Rank #2 (Buy).


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