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On Monday, Canaccord Genuity adjusted its outlook on Illumina stock (NASDAQ:ILMN), reducing the price target to $87 from the previous $92, while continuing to recommend a Hold rating. The revision reflects heightened uncertainty following Illumina’s updated 2025 guidance, which accounts for several challenging factors that could impact the company’s growth trajectory. According to InvestingPro data, the stock has fallen nearly 52% over the past six months, with 10 analysts recently revising their earnings expectations downward. The company’s current market capitalization stands at approximately $12 billion.
Illumina reported its first quarter 2025 financial results on Thursday, May 8, delivering figures that aligned with both Canaccord Genuity’s projections and the FactSet consensus. Despite this, the company experienced a decline in NovaSeq X shipments compared to the fourth quarter of 2024, though the numbers were slightly higher than those of the same period in the previous year. The company maintains a strong gross profit margin of 69%, though InvestingPro analysis shows it hasn’t been profitable over the last twelve months, with revenue declining by 3.5% during this period.
The company did, however, see an increase in clinical consumables revenue, growing in the mid-single digits year-over-year. Additionally, Illumina’s instrument placements in clinical settings stood out as a positive development during the quarter. Despite these gains, the company is navigating through several significant obstacles.
Illumina is currently contending with a recent ban on importing its sequencers into China, the effects of tariffs—which are impacting many global businesses—and ongoing uncertainty regarding research funding in the U.S., such as that from the National Institutes of Health (NIH). In response to these challenges, Illumina has revised its revenue and non-GAAP guidance for 2025 downward, primarily due to the exclusion of most anticipated revenue from China. Despite these headwinds, the company maintains a moderate debt level and a healthy current ratio of 1.86, earning a "Fair" overall financial health score from InvestingPro’s comprehensive analysis framework.
Nevertheless, Illumina’s management remains focused on achieving high single-digit revenue growth and a 500 basis point margin expansion by 2027, excluding the Chinese market. Canaccord Genuity has stated that it will maintain its Hold rating on Illumina shares until the company can demonstrate the feasibility of these targets amidst the current headwinds. For deeper insights into Illumina’s financial health, growth prospects, and valuation metrics, investors can access the comprehensive Pro Research Report available exclusively on InvestingPro, which provides detailed analysis of this and 1,400+ other top US stocks.
In other recent news, Illumina Inc. reported its first-quarter 2025 earnings, revealing an earnings per share (EPS) of $0.97, surpassing analysts’ expectations of $0.94. Revenue matched forecasts at $1.04 billion, although it marked a slight year-over-year decline of 1.4%. The company has initiated a $100 million cost reduction program in response to ongoing challenges in the research market impacting revenue growth. Meanwhile, TD Cowen adjusted its outlook on Illumina, raising the stock price target to $89 from $86, while maintaining a Hold rating. This adjustment reflects cautious optimism about Illumina’s ability to navigate its current challenges, including macroeconomic pressures and shifts in the China market. Illumina’s strategic focus remains on cost management and innovation in sequencing technology, with a projected revenue range for 2025 between $4.18 billion and $4.26 billion. Analysts from TD Cowen foresee only a modest recovery by 2026, citing the company’s effective cost management and growth in the clinical segment. Investors continue to closely monitor Illumina’s performance, particularly in light of its revised financial guidance and strategic moves.
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