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Illumina (ILMN) Sequencing & Microarray Sales Hurt by Pandemic
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On Feb 16, we issued an updated research report on Illumina, Inc. (ILMN - Free Report) . The company’s market opportunities continue to expand owing to accelerated demand from clinical and translational customers. However, government budget cuts, including NIH funding issues, and competition act as major downsides.
The coronavirus pandemic has been wreaking havoc on the global economy, thus hurting the top line of almost all companies. Illumina has not been an exception to the economic havoc and subsequent fall in revenues. In the fourth quarter of 2020, the top line remained flat year over year due to continued pandemic-led business disruptions. Segmental performance was also disappointing, with Sequencing revenues (a subsegment of the Service & Other segment) registering a fall of 14.5% from the year-ago quarter. Total Microarray revenues were also down by 7.8%, the pandemic being one of the reasons behind it.
Further, the company’s total sequencing consumables revenues were down 2% year over year due to pandemic-led impact on academic and research institutions. Research and Applied segment’s revenues were down 6% year over year as customers were impacted by the pandemic.
Also, seasonality in DTC functionality continues to erode Illumina’s microarray sales. Funding issues further restrict growth. Additionally, the company is operating in a tough competitive landscape.
On a positive note, there was sequential improvement in segmental revenues across most geographies in the fourth quarter. Additionally, the robust adoption of NovaSeq 6000 v1.5 reagents to enhance deeper genomic discoveries looks impressive. The announcement of TSO 500 partnerships with Bristol Myers Squibb, Kura Oncology, Myriad Genetics and Merck to advance comprehensive genomic profiling, as well as with Harvard Pilgrim Health Care to expand access to whole-genome sequencing for genetic disease testing augur well for the company.
Solid long-term growth potential in the oncology space and worldwide expansion to drive growth also buoy optimism. A strong solvency position is an added plus.
Overall, in the past six months, Illumina has outperformed its industry. The stock has gained 42.5% compared with the industry's rise of 11.4%. Illumina exited the fourth quarter with better-than-expected results. The gradually improving business conditions buoy optimism on the stock.
Zacks Rank and Key Picks
Illumina currently carries a Zacks Rank #5 (Strong Sell).
Abbott Laboratories has a projected long-term earnings growth rate of 14%.
Myomo has a projected long-term earnings growth rate of 22%.
Apyx Medical has an estimated long-term earnings growth rate of 27%.
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Illumina (ILMN) Sequencing & Microarray Sales Hurt by Pandemic
On Feb 16, we issued an updated research report on Illumina, Inc. (ILMN - Free Report) . The company’s market opportunities continue to expand owing to accelerated demand from clinical and translational customers. However, government budget cuts, including NIH funding issues, and competition act as major downsides.
The coronavirus pandemic has been wreaking havoc on the global economy, thus hurting the top line of almost all companies. Illumina has not been an exception to the economic havoc and subsequent fall in revenues. In the fourth quarter of 2020, the top line remained flat year over year due to continued pandemic-led business disruptions. Segmental performance was also disappointing, with Sequencing revenues (a subsegment of the Service & Other segment) registering a fall of 14.5% from the year-ago quarter. Total Microarray revenues were also down by 7.8%, the pandemic being one of the reasons behind it.
Further, the company’s total sequencing consumables revenues were down 2% year over year due to pandemic-led impact on academic and research institutions. Research and Applied segment’s revenues were down 6% year over year as customers were impacted by the pandemic.
Illumina, Inc. Price
Illumina, Inc. price | Illumina, Inc. Quote
Also, seasonality in DTC functionality continues to erode Illumina’s microarray sales. Funding issues further restrict growth. Additionally, the company is operating in a tough competitive landscape.
On a positive note, there was sequential improvement in segmental revenues across most geographies in the fourth quarter. Additionally, the robust adoption of NovaSeq 6000 v1.5 reagents to enhance deeper genomic discoveries looks impressive. The announcement of TSO 500 partnerships with Bristol Myers Squibb, Kura Oncology, Myriad Genetics and Merck to advance comprehensive genomic profiling, as well as with Harvard Pilgrim Health Care to expand access to whole-genome sequencing for genetic disease testing augur well for the company.
Solid long-term growth potential in the oncology space and worldwide expansion to drive growth also buoy optimism. A strong solvency position is an added plus.
Overall, in the past six months, Illumina has outperformed its industry. The stock has gained 42.5% compared with the industry's rise of 11.4%. Illumina exited the fourth quarter with better-than-expected results. The gradually improving business conditions buoy optimism on the stock.
Zacks Rank and Key Picks
Illumina currently carries a Zacks Rank #5 (Strong Sell).
A few better-ranked stocks in the broader medical space are Abbott Laboratories (ABT - Free Report) , Myomo, Inc. (MYO - Free Report) and Apyx Medical Corporation (APYX - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of Zacks #1 Rank (Strong Buy) stocks here.
Abbott Laboratories has a projected long-term earnings growth rate of 14%.
Myomo has a projected long-term earnings growth rate of 22%.
Apyx Medical has an estimated long-term earnings growth rate of 27%.
Legal Marijuana: An Investor’s Dream
Imagine getting in early on a young industry primed to skyrocket from $17.7 billion in 2019 to an expected $73.6 billion by 2027.
Although marijuana stocks did better as the pandemic took hold than the market as a whole, they’ve been pushed down. This is exactly the right time to get in on selected strong companies at a fraction of their value before COVID struck. Zacks’ Special Report, Marijuana Moneymakers, reveals 10 exciting tickers for urgent consideration.
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