If you've ever had your genes sequenced via a healthcare provider or genealogy service, there's a good chance that your sample was processed using one of Illumina's (NASDAQ: ILMN) sequencing machines. The company's global dominance of the sequencer market is doubtlessly one of the main reasons for investing in its stock, and with the importance of genetic information only increasing over time, it's an obvious candidate for a long-term hold -- except for its stock's stark underperformance, that is.
With its shares declining by 26% over the last three years in comparison to the market's gain of 45%, even more patient investors might be starting to get nervous about the company's future. Now, with one of its growth-oriented acquisitions in danger and its financial performance flagging, questions about its future are swirling. Is it still a buy, or is this business starting to buckle?
The biggest reason to avoid buying Illumina stock right now is that one of its core markets is looking like it's starting to get tapped out. The company makes three classes of gene sequencers: low throughput, medium throughput, and high throughput. And, as of the second quarter, its sales of low-throughput devices are flat relative to a year ago.
Source Fool.com