ILMN - Embedded Expectations Analysis - 2020 11 13
Illumina, Inc. (ILMN:USA) currently trades above corporate averages relative to UAFRS-based (Uniform) earnings, with a 38.1x Uniform P/E. Even at these levels, the market is pricing in expectations for profitability to remain near recent lows, and management may be concerned about academic market uncertainties, TrueSight Software Suite's potential, and sequencing platform developmentSpecifically, management may lack confidence in their ability to secure more sequencing opportunities and sustain innovation momentum across the entire sequencing workflow. Management may also be exaggerating incoming research projects' need for next-generation sequencing (NGS), the research market's interest on the new NovaSeq technology, and the potential increases in National Institutes of Health (NIH) and National Human Genome Research Institute (NHGRI) funding. Moreover, they may have concerns about the deferred and uncertain projects in the research markets, customers switching to nonsequencing-based coronavirus diagnostic testing, and the potential of the TrueSight Software Suite. They may also lack confidence in their ability to make NovaSeq regent kits accessible to all their customers and accelerate their legacy NextSeq 2000 conversions, and in their customers' ability to scale up their diagnostic capabilities
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.
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