Shares of Illumina (NASDAQ: ILMN) trended lower in morning trading on Tuesday as the DNA sequencing and array-based technology company’s outlook for FY23 came in below expectations.
The company expects its revenues in FY23 to grow in the range of 7% to 10% year-over-year to be between $4.90 billion and 5.03 billion. This guidance was below analysts’ expectations of revenues of $5.05 billion.
ILMN has forecasted its non-GAAP operating margin to stand at around 8% in FY23 while adjusted earnings are likely to come in between $1.25 and $1.50 per share, much below consensus estimates of $3.10.
The company also announced its preliminary Q4 and FY22 revenues of $1.075 billion and $4.58 billion, respectively. Analysts were expecting ILMN to clock in Q4 revenues of around $1.06 billion.
Following the disappointing guidance, Bank of America analyst Michael Ryskin, while keeping a Hold rating on the stock, lowered the price target to $210 from $220.
The analyst pointed out that ILMN’s FY23 EPS outlook was more than 50% below Street estimates but for now, he was willing to give the company benefit of the doubt. However, Ryskin added that he was “left with more questions than answers given the surprising ’23 outlook.”
Analysts are cautiously optimistic about ILMN stock with a Moderate Buy consensus rating based on eight Buys, five Holds, and two Sells.
