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On Thursday night Illumina reported their latest quarterly results. In August last year the share price was at $300 a share, and before the results it had managed to climb to $400 a share. Unfortunately, the numbers missed expectations and the stock dropped 11% to $355 a share.
The company's customers are adversely impacted by the lockdown, where many research labs were/are shut. Illumina reported sales of $633m, down 25% and EPS of $0.62, down 54%. The good news is that cash and debt levels remained around the same level as the previous quarter - they have $3.3 billion in cash on the balance sheet.
On top of the results, they also announced their NovaSeq 6000 v1.5 Reagent Kit. These test kits are cheaper, have a longer shelf life, are more reliable and are able to detect more in the genome. As the tests get better, the more people will use them, which means more Illumina machines will be sold.
The DNA sequencing industry is still in its infancy, its like the computer industry at the turn of the century when things were still rather bulky, slow and expensive. As technology improves, costs will come down and DNA sequencing will become more mainstream. Illumina is the leading company in this burgeoning industry. As such, the share price ride will be wild, but if you can handle all the volatility, it is worth having a small portion.
