Analyzing Illumina (ILMN) & Pacific Biosciences (PACB)

Illumina (NASDAQ: ILMN) and Pacific Biosciences (NASDAQ:PACB) are both medical companies, but which is the superior investment? We will contrast the two businesses based on the strength of their risk, institutional ownership, analyst recommendations, earnings, profitability, valuation and dividends.

Volatility and Risk

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Illumina has a beta of 0.89, indicating that its stock price is 11% less volatile than the S&P 500. Comparatively, Pacific Biosciences has a beta of 1.61, indicating that its stock price is 61% more volatile than the S&P 500.

Earnings & Valuation

This table compares Illumina and Pacific Biosciences’ top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Illumina $2.75 billion 13.28 $726.00 million $4.00 62.25
Pacific Biosciences $93.47 million 3.64 -$92.18 million ($0.87) -2.97

Illumina has higher revenue and earnings than Pacific Biosciences. Pacific Biosciences is trading at a lower price-to-earnings ratio than Illumina, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a summary of current ratings and target prices for Illumina and Pacific Biosciences, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Illumina 1 6 13 0 2.60
Pacific Biosciences 0 2 1 0 2.33

Illumina currently has a consensus target price of $242.94, suggesting a potential downside of 2.43%. Pacific Biosciences has a consensus target price of $6.27, suggesting a potential upside of 142.89%. Given Pacific Biosciences’ higher probable upside, analysts plainly believe Pacific Biosciences is more favorable than Illumina.

Insider and Institutional Ownership

91.7% of Illumina shares are owned by institutional investors. Comparatively, 58.9% of Pacific Biosciences shares are owned by institutional investors. 0.5% of Illumina shares are owned by company insiders. Comparatively, 13.4% of Pacific Biosciences shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Profitability

This table compares Illumina and Pacific Biosciences’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Illumina 26.56% 21.71% 11.94%
Pacific Biosciences -98.63% -98.98% -59.92%

Summary

Illumina beats Pacific Biosciences on 11 of the 14 factors compared between the two stocks.

About Illumina

Illumina, Inc. provides sequencing and array-based solutions for genetic analysis. The company operates in two segments, Core Illumina and Consolidated VIEs. It offers sequencing by synthesis technology that provides researchers with various applications and the ability to sequence mammalian genomes; and arrays for a range of deoxyribonucleic acid and RNA analysis applications, including single nucleotide polymorphism genotyping, copy number variations analysis, gene expression analysis, and methylation analysis, as well as allow the detection of known genetic markers on a single array. The company also provides various library preparation and sequencing kits to simplify workflows and accelerate analysis; and genome sequencing, genotyping, and noninvasive prenatal testing, as well as products support services. It serves genomic research centers, academic institutions, government laboratories, and hospitals; and pharmaceutical, biotechnology, agrigenomics, and commercial molecular diagnostic laboratories, as well as consumer genomics companies. The company markets and distributes its products directly to customers, as well as through life-science distributors. It operates in North America, Europe, Latin America, the Asia-Pacific region, the Middle East, and South Africa. Illumina, Inc. was founded in 1998 and is headquartered in San Diego, California.

About Pacific Biosciences

Pacific Biosciences of California, Inc. designs, develops, and manufactures sequencing systems to resolve genetically complex problems. The company's single molecule real-time (SMRT) sequencing technology enables single molecule real-time detection of biological processes. It offers PacBio RS II and Sequel Systems that conducts, monitors, and analyzes single molecule biochemical reactions in real time. The company also provides consumable products, including SMRT cells, as well as various reagent kits, such as template preparation, binding, and sequencing kits. Its customers include research institutions; commercial laboratories; genome centers; clinical, government, and academic institutions; genomics service providers; pharmaceutical companies; and agricultural companies. The company markets its products through a direct sales force in North America and Europe, as well as primarily through distribution partners in Asia, the Middle East, and Latin America. The company was formerly known as Nanofluidics, Inc. Pacific Biosciences of California, Inc. was founded in 2000 and is headquartered in Menlo Park, California.

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