The Genome Trade is BACK

Illumina $ILMN is one of those companies that sounds complicated until you strip it down to the basics.

This is the company that helps scientists, hospitals, drug developers, and researchers read DNA.

That matters because DNA sequencing sits at the center of some of the most important trends in healthcare, including cancer testing, rare disease diagnosis, reproductive health, drug discovery, agriculture, and the broader move toward more personalized medicine.

In plain English, Illumina sells the picks and shovels for the genomics revolution.

And after several ugly years, the stock is finally starting to act as if that story matters again.

This is a $27 billion diagnostics and research stock, and it's one of our favorite names inside the recent healthcare rotation because it checks all three boxes we care about at the Beat Report.

The technicals are improving.

The fundamentals are strengthening.

And the earnings sentiment has flipped from a major headwind into a real tailwind.

Let's start with the technicals... 

Illumina was kicked out of the S&P 500 around this time last year, as sentiment for this former healthcare darling was in the gutter.

But markets love to bottom when everyone has given up.

Since then, ILMN has carved out a textbook bearish-to-bullish reversal pattern, and it's now breaking out to new multi-year highs.

After years of lower highs, failed rallies, and investor frustration, price is finally in a new primary uptrend.

So long as ILMN holds above $156, the path of least resistance is decisively higher for the foreseeable future.

And the earnings scorecard helps explain why this breakout deserves our attention.

Illumina reported a double beat last quarter, with revenue growing 4.8% YoY and non-GAAP EPS growing nearly 19% over the same period.

That may not sound explosive, but the direction of travel is what matters here.

Revenue growth is back in positive territory, earnings growth is healthy, margins are expanding, and management raised full-year revenue and EPS guidance after the quarter.

But here is the key point for us…

The market is finally rewarding it.

Last October, ILMN posted its best earnings reaction since 2006, and its second-best earnings reaction ever.

That was the earnings sentiment flip.

Then last quarter, the stock rallied more than 7% after another double beat and continued drifting higher, gaining another 25% in the month after the report.

That kind of post-earnings drift is exactly what we want to see.

It means investors are sticking around and continuing to accumulate shares after the dust settles.

So, when we put the whole story together, Illumina offers one of the most compelling fusion analysis setups in healthcare.

The chart is breaking out to new multi-year highs.

The fundamentals are improving.

And the earnings sentiment has shifted decisively bullish after years of punishment.

ILMN is exactly the kind of stock we want to focus on as healthcare emerges as a leading sector.

And that brings us to our next Beat Report Pitch Meeting.

Earlier this month, we held our first-ever public Beat Report Pitch Meeting. 

These are the meetings we usually hold internally, where our Beat Team brings their highest-conviction trade ideas to Steve Strazza and debates them in real time.

For the first time, we pulled back the curtain and let members watch the process LIVE earlier this month.

And because of the overwhelming amount of positive feedback we've received, we're doing it again on Monday.

If you want access to the next pitch meeting, our current watchlist, and the next trade alert we send to members, join Beat Report today.

We hope to see you there!

Cheers to the new quarter,

-The Beat Team