A quick analysis of Illumina Inc. (NASDAQ:ILMN) stock history reveals plenty of huge swings for this biotech specializing in genomic sequencing. The following chart, however, shows the rewards for investors who had the foresight to buy Illumina years ago.
|Initial public offering (IPO)||July 28, 2000|
|Peak gain||1,130% (as of July 20, 2015)|
|Current gain||816% (as of June 6, 2017)|
There have been five primary stages in the genomic-sequencing pioneer's history. Here's what has happened with Illumina stock history so far.
Digging out of the hole
The first years for Illumina weren't too fun for shareholders. Illumina was founded in April 1998, but its stock didn't trade publicly until July 2000. Basically, the company went public at about the worst timing for a technology company to do so -- right before the dot-com bubble burst.
It took nearly seven years for the company to dig itself out of the hole. During this period, however, Illumina was steadily growing and improving its financials as its DNA-sequencing systems gained traction. In the company's first full year of operations (1999), Illumina reported revenue of only $474,026 and a net loss totaling over $5.5 million. By the end of 2006, Illumina was profitable, with nearly $40 million of net income on revenue of $184.6 million.
Illumina posted a net loss again in 2007. However, that actually was good news in a sense because the loss resulted from the company's acquisition of Solexa. The combination of the two companies created a virtually unstoppable force in the world of genetic sequencing.
Getting through the financial crisis
Unfortunately, it wasn't long after Illumina stock completed its rebound to levels not seen since 2000 that the company faced another major challenge. The financial crisis of 2008 took a heavy toll on most stocks. Illumina was no exception.
Illumina's share price plunged in 2008. It took the stock around two years to recover from this blow. Again, however, Illumina continued to perform well on the business side of things. Revenue and earnings grew steadily, even in the midst of global economic uncertainty.
The company and its stock continued to rock along throughout 2010 and the first half of 2011. Illumina's launch of its high-throughput HiSeq sequencing system was a big hit with customers. However, by the second half of 2011, the company encountered more challenges -- and more questions.
Illumina's revenue and earnings declined in the third quarter of 2011 compared to the prior-year period. The company reported a decrease in consumable revenue per instrument. Even worse, sales of Illumina's sequencing systems fell in the midst of uncertainty about the levels of academic funding in the United States and Europe and excess sequencing capacity in the market. The company underwent a painful restructuring, laying off 200 employees in the process.
In early 2012, Illumina stock roared back, but it wasn't for a reason that the company's management particularly liked. Roche Holding (NASDAQOTH:RHHBY) attempted a hostile takeover of Illumina. This takeover ultimately failed. While the drama played out, Illumina stock bounced up and down.
Once the dust settled from the attempted takeover by Roche, Illumina stock entered the best period of the company's history. From early 2013 through mid-2015, Illumina's share price nearly quadrupled.
Pretty much everything went right for the company during this period. Revenue and earnings soared as Illumina's recurring revenue from consumables and services grew. There were no major financial crises or government funding uncertainties.
The most recent stage of Illumina stock history is reminiscent of a roller-coaster ride. Shares have notched nice gains, followed by not-so-nice losses before surging back again.
Some of Illumina's woes in 2016 were self-inflicted. The company's management missed not only Wall Street analysts' estimates but also its own internal guidance. Illumina promised to fix its forecasting issues. However, some issues experienced in the past also came back -- government funding questions in particular.
Illumina launched a new sequencing system in 2017 called NovaSeq. This system should reinvigorate sales with its flexibility and cost advantages for customers. The company's business model is solid, with roughly two-thirds of its revenue stemming from recurring revenue, including sales of consumables. Demand for Illumina's technology should also continue to increase, especially with the global push for precision medicine. Because of these factors, I suspect that the best might be yet to come for Illumina's shareholders.