Illumina (ILMN 317.48, +3.68, +1.27%) beat quarterly estimates on the top and
bottom line for the sixth quarter in a row yesterday afternoon.
Third quarter revenue grew 20% to $853 mln. Non-GAAP EPS rose 37% to $1.52 and free cash flow rose 49% to $228 mln.
Chief Executive Francis deSouza: "Sequencing system revenue of $138 million was the strongest since 2015, reflecting strong demand within our sequencing family from the NovaSeq, the most powerful and flexible sequencer ever, to the iSeq, our most accessible and easiest-to-use sequencer."
The company raised fiscal 2018 EPS guidance to $5.70-5.75 from $5.35-5.45.
Illumina is the global leader in DNA sequencing. DNA analysis has massive potential to transform the medical field.
The first human genome sequencing cost $3 mln in 2003. Illumina's latest NovaSeq machine costs close to $1 mln, but it can sequence the human genome for ~$1,000.
Revenue growth has accelerated since the launch of the NovaSeq last year. Sequencing consumable revenue has grown at a 28% comping annual growth rate (CAGR) since 2012.
The company believes a new sequencing architecture will one day enable a $100 at genome.
In late August, the MiSeqDx Sequencing System became the company's first China National Drug Administration (CNDA)-cleared, next-generation sequencing (NGS) system in China.
Illumina is also a founding partner and the largest shareholder of Helix, which offers at-home DNA testing for consumers, using Illumina technology.
Revenue growth is currently expected to slow to ~13% next year after accelerating to ~20% this year.
Illumina has a promising future, but the stock is not necessarily cheap. With a $46 bln market value, it trades at over 50x EPS estimates.
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