Stock Analysis

What Does Illumina, Inc.'s (NASDAQ:ILMN) Share Price Indicate?

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NasdaqGS:ILMN
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Let's talk about the popular Illumina, Inc. (NASDAQ:ILMN). The company's shares saw a decent share price growth in the teens level on the NASDAQGS over the last few months. As a large-cap stock with high coverage by analysts, you could assume any recent changes in the company’s outlook is already priced into the stock. But what if there is still an opportunity to buy? Let’s take a look at Illumina’s outlook and value based on the most recent financial data to see if the opportunity still exists.

View our latest analysis for Illumina

What is Illumina worth?

The stock seems fairly valued at the moment according to my valuation model. It’s trading around 8.9% below my intrinsic value, which means if you buy Illumina today, you’d be paying a reasonable price for it. And if you believe that the stock is really worth $460.71, then there’s not much of an upside to gain from mispricing. In addition to this, Illumina has a low beta, which suggests its share price is less volatile than the wider market.

Can we expect growth from Illumina?

earnings-and-revenue-growth
NasdaqGS:ILMN Earnings and Revenue Growth November 4th 2021

Future outlook is an important aspect when you’re looking at buying a stock, especially if you are an investor looking for growth in your portfolio. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at the company's future expectations. With profit expected to grow by 67% over the next couple of years, the future seems bright for Illumina. It looks like higher cash flow is on the cards for the stock, which should feed into a higher share valuation.

What this means for you:

Are you a shareholder? ILMN’s optimistic future growth appears to have been factored into the current share price, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the track record of its management team. Have these factors changed since the last time you looked at the stock? Will you have enough conviction to buy should the price fluctuates below the true value?

Are you a potential investor? If you’ve been keeping an eye on ILMN, now may not be the most advantageous time to buy, given it is trading around its fair value. However, the optimistic prospect is encouraging for the company, which means it’s worth further examining other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.

With this in mind, we wouldn't consider investing in a stock unless we had a thorough understanding of the risks. For example, we've discovered 3 warning signs that you should run your eye over to get a better picture of Illumina.

If you are no longer interested in Illumina, you can use our free platform to see our list of over 50 other stocks with a high growth potential.

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