Fans of go-go growth stocks are fond of saying that valuations don't matter. And maybe they're right. There was little fundamental support for the valuation of genetic tools company Illumina (Nasdaq:ILMN) going into its second quarter earnings, and the nearly 18% drop immediately afterward also seemed to have little to do with any sort of sober valuation calculation. When growth is all that matters, rational trading goes out the window.
Q2 Results Not So Bad
Illumina did not sell off because of the Q2 results the company reported. Revenue rose 36% from last year, with sequencing revenue up about 53% and micro-array revenue up 10%. Consumable sales were up 26% (and up 7% sequentially), and the company did seem to experience a lesser degree of pull-through for its HiSeq platform.
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2 comments:
Nicely written. I have always felt that the reliance of many of these toolmaker companies on academic funding is under appreciated.
Thanks.
And not only that, but how much of that academic funding is just a govt subsidy.
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