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What Does the Future Look Like for Illumina Stock?

By Taylor Carmichael – Aug 11, 2021 at 6:00AM

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The leader in the genomics space is being treated like a monopoly, and is now running into federal regulation and oversight.

Illumina (ILMN -0.95%) stock has been a huge winner, running up 2,400% over its 21-year history. Will the stock continue to double again, and again, and again? Or is the company likely to underperform the market going forward?

ILMN Chart

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Motley Fool editor and analyst Olivia Zitkus, and Fool contributor Taylor Carmichael discuss the future of Illumina. This Fool Live conversation was recorded on July 30.

Olivia Zitkus: With our last couple of minutes, I want to ask you one question about a stock that's expected to report earnings soon. Illumina, we're expecting earnings from that company -- genome, sequencing, and genetic testing company -- on August 5th. The Q1 looks pretty solid. We saw 27 percent year-over-year revenue growth and it's profitable in a space where plenty of biotech companies simply are not. What are you looking for in this Q2 earnings report? Do you have any thoughts for people to take away from that?

Taylor Carmichael: Yeah, Illumina has been a huge winner for Fools. It's just been one of the massive winners in the genomics space. To my mind, I'm not invested in Illumina, I feel like I missed it. I could be right or I could be wrong, but to me, the big question for investors going forward, are they're going to continue to grow? How are they going to be in the next five years, in the next 10 years? A couple of danger signs for that, one is they tried to acquire one of their competitors, Pacific Biosystems of California (PACB -3.79%), PacBio is what I call them. PacBio does a different genomic sequencing and I'm getting out of my capabilities here. But I think one of them is short-form and the other is long form. I think PacBio is long form. It's much smaller than Illumina, right? But that is considered -- their technology is very good. Illumina wanted to acquire them, wanted to buy them. That was quashed by the FTC. They did not want that merger to go through it, so that merger died. That's of interest to me that Illumina wanted to buy this little company, this little competitor. PacBio has been a terrific stock. It's done really well of late. It's one of Cathie Wood's favorites, PacBio is like a top three holding. I'm a big Cathie Wood fan. She used to be, she was a big supporter of Illumina.

Olivia Zitkus: Right, they held a ton of Illumina shares?

Taylor Carmichael: Yeah. "This is the keystone for our philosophy," is what she was saying in 2016. Now she doesn't own any Illumina. She is very much a growth investor, kind of my soul sister like that.

Olivia Zitkus: [laughs]

Taylor Carmichael: I love growth stocks. To me, that's the question for Illumina. Are they going to continue to grow, or is this market kind of saturated?

Next video: Why Does Illumina Want to Reunite With Grail? 

Taylor Carmichael has no position in any of the stocks mentioned. The Motley Fool recommends Illumina. The Motley Fool has a disclosure policy.

Stocks Mentioned

Illumina Stock Quote
$218.76 (-0.95%) $-2.10
Pacific Biosciences of California Stock Quote
Pacific Biosciences of California
$10.66 (-3.79%) $0.42

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

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