Morningstar | Illumina’s Strong Growth Should Continue in 2019
We don’t anticipate any change to our fair value estimate for Illumina as we make a few adjustments to our model, including incorporating the Pacific Biosciences acquisition into our forecasts. Illumina ended the year mostly as expected, with 11% growth led by 21% growth in sequencing instruments and 8% growth in sequencing consumables. Management noted sequencing consumables growth of 16% when accounting for stocking effects. The product mix shift toward instruments kept adjusted operating margin at 24.3%, down from 31.4% last year. Overall, we still think Illumina remains well positioned to sustain its leadership in the genome sequencing market, and we’re leaving our narrow moat rating in place.Management’s previously announced outlook for 13% to 14% revenue growth in 2019 matches our expectations. The growth forecast stems from mid-single-digit instrument growth and sequencing consumables growth of over 20%, which seems feasible given the ramp up in utilization of its growing installed base of machines. Ongoing market penetration of genome sequencing, including oncology panel tests and non-invasive prenatal screening, will remain a strong tailwind for Illumina. Additionally, the upgrade cycle to the newer high throughput NovaSeq product line should continue as well even though shipments fell slightly short of management’s expectations for at least 330 placements during the year. Along with the launch of a S Prime flow cell for NovaSeq, Illumina will discount the lower throughput S1 and S2 flowcells to help push new or current benchtop customers onto this higher throughput platform. Lastly, management’s outlook for adjusted EPS of $6.50-$6.60 in 2019 is just slightly ahead of our current estimate.
Illumina is engaged in sequencing- and array-based solutions for genetic and genomic analysis. The company provides whole-genome sequencing, genotyping, noninvasive prenatal testing (NIPT), and product support services. Using the company's services, customers can perform whole-genome sequencing projects and microarray projects (including large-scale genotyping studies and whole-genome association studies). The company provides NIPT services through its partner laboratories that direct samples to the company on a test send-out basis in its Clinical Laboratory Improvements Amendments-certified, College of Pathologists-accredited laboratory. The company also provides support services to customers who have purchased its products.
Morningstar, Inc. is a leading provider of independent investment research in North America, Europe, Australia, and Asia. The company offer an extensive line of products and services for individual investors, financial advisors, asset managers, and retirement plan providers and sponsors.
Morningstar provides data on approximately 530,000 investment offerings, including stocks, mutual funds, and similar vehicles, along with real-time global market data on more than 18 million equities, indexes, futures, options, commodities, and precious metals, in addition to foreign exchange and Treasury markets. Morningstar also offers investment management services through its investment advisory subsidiaries and had approximately $185 billion in assets under advisement and management as of June 30, 2016.
We have operations in 27 countries.
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.