The stock price of Illumina (ILMN), a provider of sequencing solutions for genetics analysis, is ripping to all-time highs, as its core fundamentals continue to be overwhelmingly strong; 85% of revenues come from product sales, while the remaining revenue stream comes from services.
The public knows little about this company, but, as Luke Timmerman from Forbes writes: "Just as Intel (INTC) became the company that sparked so much of the computer revolution, Illumina has risen to prominence as a driver of the genomics revolution." That's high praise, and better yet, it's true.
Illumina makes the tools that allow biotechs and pharmas to do their drug trials and get approvals. The company actually makes the machines that sequence genomes, so the company is the very backbone of all other biotech/pharmas hurrying to detect various illnesses or irregularities through DNA-based technology. It's almost impossible to get too excited about the firm's success so far, and about its potential future. Of course, stock prices can get ahead of themselves, but the company itself is in fact a marvel.
Illumina is focusing growth in two areas, namely reproductive and genetic health and oncology. The company has placed a lot of weight and had a lot of success with strategic partnerships including AstraZeneca (AZN), Janssen and Sanofi (SNY). But perhaps its most exciting recent partnership is with Merck (MRK), to start developing an oncology diagnostic.
The company's technicals look like this: support at $213.98, resistance at $220.75. Golden Cross Alert: the 50-day MA is now above the 200-day MA. Swing Golden Cross Alert: The short-term 10-day MA is now above the 50-day MA.
Illumina has a five bull (top-rated) technical rating, because it's trading above its 10-, 50-and 200- day moving averages and the stock is up on the day.
Let's look at the core elements that drive the company's fundamental rating.
Revenue (TTM) is trending higher, meaning that it has increased for at least five consecutive quarters (in this particular case, 20 consecutive quarters). ILMN revenue is up over 30% year on year, and 65% over two years. It continues to make all-time highs and shows no signs of slowing... at all.
What do all these numbers mean?
ILMN's fundamental rating benefited these results:
- The one-year change was positive.
- The one-year change was greater than +20% (an extra boost to the rating).
- The two-year change was positive.
Let's look at Revenue (TTM $ Millions) in the chart below.
It is obvious that the up-trend (consecutive quarters) in revenue benefited the fundamental (star) rating for Illumina.