Illumina (NASDAQ:ILMN) is a company that provides tools and services to analyze genetic material with life science and clinical lab applications.
Shares have dropped 3% over the past three months, and the stock plunged 7.8% on October 25. The stock took a dip after its third-quarter earnings release.
Its results beat analysts’ revenue and earnings estimates but concerns for its short-term growth prospects dimmed an otherwise solid report.
For one, Illumina expects that its direct-to-consumer (DTC) business will struggle to return to growth in the near term. It has also experienced downward pressure from its desktop systems but said that this will be resolved going forward as customers are moving to more capable platforms.
To make matters worse, Illumina has also suffered a setback regarding its proposed acquisition of Pacific Biosciences of California. Late last week, the United Kingdom’s Competition and Markets Authority (CMA) announced a provisional decision that would block the merger.
Worldwide, Illumina currently controls 80% of the DNA sequencing industry. Illumina has the option to push the deadline for the closing of the deal from December 31 to March 31, 2020.
I like Illumina in the long term, and the recent dip provides an opportunity to pick up the stock at a discount. Shares currently have an RSI of 41, putting it outside of technically oversold territory.
If Illumina suffers a further retreat this week investors should consider jumping on this buy-low opportunity.
