Stock Analysis

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

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NasdaqGS:ILMN
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Today we're going to take a look at the well-established Illumina, Inc. (NASDAQ:ILMN). The company's stock saw significant share price movement during recent months on the NASDAQGS, rising to highs of US$424 and falling to the lows of US$324. Some share price movements can give investors a better opportunity to enter into the stock, and potentially buy at a lower price. A question to answer is whether Illumina's current trading price of US$356 reflective of the actual value of the large-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Illumina’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.

See our latest analysis for Illumina

Is Illumina still cheap?

Good news, investors! Illumina is still a bargain right now. My valuation model shows that the intrinsic value for the stock is $550.67, which is above what the market is valuing the company at the moment. This indicates a potential opportunity to buy low. Another thing to keep in mind is that Illumina’s share price may be quite stable relative to the rest of the market, as indicated by its low beta. This means that if you believe the current share price should move towards its intrinsic value over time, a low beta could suggest it is not likely to reach that level anytime soon, and once it’s there, it may be hard to fall back down into an attractive buying range again.

What kind of growth will Illumina generate?

earnings-and-revenue-growth
NasdaqGS:ILMN Earnings and Revenue Growth February 3rd 2022

Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Although value investors would argue that it’s the intrinsic value relative to the price that matter the most, a more compelling investment thesis would be high growth potential at a cheap price. However, with a relatively muted profit growth of 7.9% expected over the next couple of years, growth doesn’t seem like a key driver for a buy decision for Illumina, at least in the short term.

What this means for you:

Are you a shareholder? Even though growth is relatively muted, since ILMN is currently undervalued, it may be a great time to accumulate more of your holdings in the stock. However, there are also other factors such as financial health to consider, which could explain the current undervaluation.

Are you a potential investor? If you’ve been keeping an eye on ILMN for a while, now might be the time to enter the stock. Its future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy ILMN. But before you make any investment decisions, consider other factors such as the strength of its balance sheet, in order to make a well-informed buy.

So if you'd like to dive deeper into this stock, it's crucial to consider any risks it's facing. For example - Illumina has 2 warning signs we think you should be aware of.

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.

What are the risks and opportunities for Illumina?

Illumina, Inc. provides sequencing and array-based solutions for genetic and genomic analysis.

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Rewards

  • Trading at 0.1% below our estimate of its fair value

  • Earnings are forecast to grow 62.83% per year

Risks

No risks detected for ILMN from our risks checks.

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