TheStreet Ratings Top 10 Rating Changes
Rating Change #4
Illumina Inc (ILMN) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its revenue growth, increase in net income, largely solid financial position with reasonable debt levels by most measures, solid stock price performance and growth in earnings per share. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity.
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Highlights from the ratings report include:
- The revenue growth came in higher than the industry average of 1.7%. Since the same quarter one year prior, revenues rose by 21.4%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Life Sciences Tools & Services industry. The net income increased by 47.6% when compared to the same quarter one year prior, rising from $20.15 million to $29.75 million.
- ILMN's debt-to-equity ratio of 0.69 is somewhat low overall, but it is high when compared to the industry average, implying that the management of the debt levels should be evaluated further. Even though the debt-to-equity ratio shows mixed results, the company's quick ratio of 4.79 is very high and demonstrates very strong liquidity.
- Powered by its strong earnings growth of 46.66% and other important driving factors, this stock has surged by 87.50% over the past year, outperforming the rise in the S&P 500 Index during the same period. We feel that the stock's sharp appreciation over the last year has driven it to a price level which is now somewhat expensive compared to the rest of its industry. The other strengths this company shows, however, justify the higher price levels.
- ILLUMINA INC has improved earnings per share by 46.7% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, ILLUMINA INC reported lower earnings of $0.62 versus $0.86 in the prior year. This year, the market expects an improvement in earnings ($1.58 versus $0.62).
Illumina, Inc. develops, manufactures, and markets life science tools and integrated systems for the analysis of genetic variation and biological function in North America, Europe, Latin America, the Asia-Pacific, the Middle East, and South Africa. The company has a P/E ratio of 73.1, above the S&P 500 P/E ratio of 17.7. Illumina has a market cap of $6.31 billion and is part of the health care sector and drugs industry. Shares are up 67.9% year to date as of the close of trading on Wednesday.