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Illumina Banks on Product Launches & Strategic Partnerships


On Mar 12, we issued an updated research report on Illumina, Inc. ILMN, a Zacks Rank #3 (Hold) stock.

Shares of the company have outperformed the broader industry over the last three months. The stock has gained 18%, higher than the broader industry’s 2.3% rise.

Illumina exited fourth-quarter 2017 on a solid note with both earnings and revenues beating the Zacks Consensus Estimate. Additionally, the metrics improved on a year-over-year basis. This apart, a progressing margin scenario instilled investor confidence in the stock.

We are also optimistic about Illumina’s expansion strategy through enhancement of its portfolio of sequencing products and the development of strategic partnerships with therapeutic and diagnostic service providers. In this regard, Illumina signed a commercial agreement earlier this January 2018, for distributing Thermo Fisher Scientific’s Ion AmpliSeq technology to researchers conducting studies on its next-generation sequencing platform.

The San Diego, CA-based Illumina is a tools and integrated systems provider for the analysis of genetic variation and function. The company focuses on product innovation via research and development, evident from its recent launch of iSeq 100 Sequencing System.

Post a promising fourth quarter, we expect Illumina to maintain growth momentum on continued uptake of sequencing consumables, instruments and microarray portfolios.

Meanwhile, the company faces stiff competition in the sequencing, SNP (single nucleotide polymorphisms) genotyping, gene expression and molecular diagnostics markets with several bigwigs already enjoying a significant market share, intellectual property portfolios as well as regulatory expertise. Also, the National Institutes of Health funding issue raises a concern.

Key Picks

Some better-ranked stocks in the broader medical sector are PerkinElmer PKI, Bio-Rad Laboratories BIO and athenahealth, Inc. ATHN.

PerkinElmer has a long-term expected earnings growth rate of 12.3%. The stock carries a Zacks Rank #2 (Buy).

Bio-Rad Laboratories sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here. The company has a long-term expected earnings growth rate of 20%.

athenahealth is a Zacks #1 Ranked player. The company has a long-term expected earnings growth rate of 21.5%.

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