BofA Cuts Illumina to Underperform Due to Growth Worries
December 13, 2023
🌧️Trending News
BofA recently downgraded Illumina ($NASDAQ:ILMN)’s stock to Underperform due to worries about its growth prospects. Illumina is a US-based biotechnology company which focuses on developing and manufacturing integrated systems for genetic analysis. Its products include sequencing platforms, as well as associated consumables, software and services that enable customers to process genetic data. Illumina has been widely used by sequencing laboratories and other research institutions to process genetic data, making it a major player in the biotechnology field. The downgrade by BofA reflects the uncertainties about Illumina’s future growth prospects. The company has had a strong performance in recent years, but with the rapid advancement of technology, there is some concern that its products may not remain competitive in the long-term.
As such, there are doubts surrounding its ability to sustain its current level of growth over the next few years. Furthermore, the stock still trades at a premium despite the downgrade, which makes it risky for investors. Overall, the downgrade by BofA to Underperform raises questions about Illumina’s future growth prospects. Investors should be wary of investing in the company given the uncertain nature of the industry and its potential risks.
Market Price
On Tuesday, Bank of America (BofA) issued a warning to investors by downgrading Illumina stock to ‘underperform’. This was in response to the company’s slowing growth rate in recent quarters, which has caused concern among traders. The stock opened at $115.7, but then dropped slightly to close at $117.6.
This warning reflects a more cautious outlook on Illumina, as analysts predict that the company may struggle in the future to achieve the same levels of growth that it has in the past. With the stock market becoming increasingly volatile, investors should be mindful of the potential risks that come with investing in Illumina. Live Quote…
About the Company
Income Snapshot
Below shows the total revenue, net income and net margin for Illumina. More…
| Total Revenues | Net Income | Net Margin |
| 4.46k | -1.12k | -10.1% |
Cash Flow Snapshot
Below shows the cash from operations, investing and financing for Illumina. More…
| Operations | Investing | Financing |
| 401 | -248 | -227 |
Balance Sheet Snapshot
Below shows the total assets, liabilities and book value per share for Illumina. More…
| Total Assets | Total Liabilities | Book Value Per Share |
| 10.12k | 4.22k | 37.14 |
Key Ratios Snapshot
Some of the financial key ratios for Illumina are shown below. More…
| 3Y Rev Growth | 3Y Operating Profit Growth | Operating Margin |
| 11.3% | -28.9% | -23.5% |
| FCF Margin | ROE | ROA |
| 3.8% | -10.5% | -6.5% |
Analysis
At GoodWhale, we conducted an analysis of ILLUMINA’s fundamentals and based on our Star Chart, classified them as a ‘rhino.’ This type of company typically has achieved moderate revenue or earnings growth. Given that ILLUMINA has an intermediate health score of 6/10, taking into consideration its cashflows and debt, it is likely to be able to pay off debt and fund any future operations. Additionally, ILLUMINA is strong in asset, profitability, medium in growth and weak in dividend. This information would be valuable to investors who are looking for moderate returns in this sector. Illumina_to_Underperform_Due_to_Growth_Worries”>More…
Peers
Its products are used by researchers in a variety of fields, including cancer, immunology, and neuroscience. Illumina‘s main competitors are Immunovia AB, Standard BioTools Inc, and BCAL Diagnostics Ltd.
– Immunovia AB ($LTS:0G8X)
Immunovia is a Swedish company that specializes in the development of blood-based diagnostics for the early detection of cancer. The company was founded in 2003 and has since then developed a number of ground-breaking products, including the world’s first blood test for the early detection of pancreatic cancer. Immunovia’s products are based on cutting-edge technology that allows for the detection of very small changes in the levels of certain proteins in the blood, which can be indicative of the presence of cancer. The company’s flagship product, the PancraFIT test, has been shown to be more than twice as accurate as current standard-of-care tests for pancreatic cancer, and is currently being used in clinical trials in Europe and the United States.
Immunovia’s market cap as of 2022 is 793.92M. The company’s Return on Equity (ROE) for the same year is -27.88%.
– Standard BioTools Inc ($NASDAQ:LAB)
Standard BioTools Inc is a company that manufactures and sells medical devices and equipment. The company has a market capitalization of $89.67 million and a return on equity of 1,331.32%. The company’s products include surgical instruments, medical devices, and laboratory equipment. Standard BioTools Inc is a publicly traded company on the Nasdaq Stock Market under the ticker symbol STBT.
Summary
Illumina has recently been cut to Underperform from its previous rating of Neutral by Bank of America, on the basis of concerns over the company’s growth prospects. Bank of America analysts cite slowing orders in the China market, competitive pressures from industry peers, and the potential for manufacturing issues as reasons for their downgrade. Investors should exercise caution when considering this stock, as it may present a greater risk than expected. It is important to monitor developments closely and factor in this new information in order to make an informed decision.
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