Illumina (ILMN) is hovering around the $300 mark after reaching an all-time high of $367 and change on September 28. This gene-sequencing company has dramatically reduced the cost of mapping human genomes. Thanks to Illumina’s work, it takes a mere $1,000 to map an individual’s genome as opposed to the $1 million required in the company’s early days.
An investment in Illumina is certainly costly yet there is still plenty of room for growth. Gene-sequencing will prove that much more important as we rapidly hurtle into a high-tech era in which gene modification is used to improve the human condition. The company has been hit by a number of challenges, leading many analysts to question whether or not its stock is still worth it.
Can Illumina weather these problems? Let’s take a closer look.
Illumina is a pioneer in the field of DNA sequencing. This company’s creations power the uber-popular 23andMe service. It is quite likely every human being living in first-world countries will have his or her DNA sequenced at some point in the future. Illumina stands to profit from this emerging trend. DNA sequencing is being that much more democratized with each passing day as its price plummets. It no longer takes a massive amount of money to map an individual’s DNA. Everyone who has tried services like 23andMe will testify it is quite affordable. Illumina’s CEO recently stated the company’s technology has advanced to the point that it might soon be possible to reduce the cost of DNA mapping to a mere $100.
Illumina sales have jumped from slightly more than $2 billion to $3.3 billion in a mere three years. The company’s sales growth is rapidly accelerating with each passing year. It is clear the masses are more than willing to pay for gene sequencing. Faulty genetics are the cause of more than 6,000 disorders. Advancements in technology are generating truly remarkable gene therapies that will likely prove successful in treating the vast majority of these disorders. However, most investors do not have a gene sequencing company in their portfolio. Though some such companies are long on hope and short on results, Illumina is the real deal. This company’s sales figures will only continue to increase as the field of genetics goes mainstream in the coming years.
Illumina is the top manufacturer of systems that conduct gene sequencing. The company’s gene sequences are essential to biopharmaceutical businesses in the gene therapy research field. Furthermore, healthcare companies are eager to perform genetic screens of those in need of medical assistance to identify the optimal treatment modalities. Ilumina customers are currently using in excess of 13,000 gene sequencing systems such as the company’s “NovaSeq” in research laboratories around the globe. Illumina’s technology has paved the way for important genetic research that would otherwise prove unaffordable or risky. Illumina has succeeded to the point that it is scooping up competitors through acquisition. The company recently acquired PacBio, a maker of long-read products that now provide Illumina with the industry’s premier gene sequencing service. Illumina also owns about one-quarter of Grail, a business that makes use of Illumina machines to develop accurate blood testing to pinpoint cancer as soon as it forms in the human body.
Some investors have raised concerns that trade conflicts with China will make it difficult for Illumina to rake in the cash in the months and years to come. All in all, Illumina revenue in the Chinese market exceeded $88 million in the first quarter of 2019. This revenue represents about a 14 percent increase from the prior quarter.
Though President Trump is intent on slapping Chinese goods with tariffs, it appears as though this brewing trade war will not affect Illumina’s gene sequencing services. The company posted revenue of $846 million this past quarter. Illumina orders totaled more than a billion dollars. The company’s diverse sequencing applications are the true drivers of its rapid and continued growth. If revenue jumps by the anticipated 14 percent in 2019 and beyond, Illumina will likely continue to trade higher.
If you do not own this gene sequencing superstar, add it to your portfolio as soon as a buying opportunity arises. Hold your shares of Illumina for years or even decades and you will likely make a tidy sum of money while doing your part to fund the research and progression of DNA sequencing that ultimately improves the human condition.
Regards,
Ethan Warrick
Editor
Wealth Authority
