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It's been a good week for Illumina, Inc. (NASDAQ:ILMN) shareholders, because the company has just released its latest first-quarter results, and the shares gained 4.3% to US$81.57. Revenues were US$1.0b, approximately in line with whatthe analysts expected, although statutory earnings per share (EPS) crushed expectations, coming in at US$0.82, an impressive 24% ahead of estimates. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.
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After the latest results, the consensus from Illumina's 20 analysts is for revenues of US$4.23b in 2025, which would reflect a perceptible 2.4% decline in revenue compared to the last year of performance. Earnings are expected to improve, with Illumina forecast to report a statutory profit of US$3.22 per share. Before this earnings report, the analysts had been forecasting revenues of US$4.29b and earnings per share (EPS) of US$3.60 in 2025. The analysts seem to have become more bearish following the latest results. While there were no changes to revenue forecasts, there was a real cut to EPS estimates.
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It might be a surprise to learn that the consensus price target fell 5.6% to US$109, with the analysts clearly linking lower forecast earnings to the performance of the stock price. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. There are some variant perceptions on Illumina, with the most bullish analyst valuing it at US$190 and the most bearish at US$70.00 per share. We would probably assign less value to the analyst forecasts in this situation, because such a wide range of estimates could imply that the future of this business is difficult to value accurately. As a result it might not be a great idea to make decisions based on the consensus price target, which is after all just an average of this wide range of estimates.
Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. We would highlight that revenue is expected to reverse, with a forecast 3.2% annualised decline to the end of 2025. That is a notable change from historical growth of 5.4% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 6.0% per year. It's pretty clear that Illumina's revenues are expected to perform substantially worse than the wider industry.