Anthony Lee
3 min read
What happened?
Shares of genomics company Illumina (NASDAQ:ILMN) fell 17.7% in the afternoon session after the company reported third-quarter 2026 financial results and highlighted impacts from being placed on China’s Unreliable Entities List.
According to a company press release, Illumina posted third-quarter 2026 GAAP revenue of $1,129 million and non-GAAP revenue excluding tariff refunds of $1,166 million. Diluted GAAP earnings per share was $1.43, and non-GAAP earnings per share excluding tariff refunds was $1.44. Revenue was below analysts’ estimates of $1.15 billion, though adjusted earnings per share was above expectations of $1.36.
During its earnings call, management explained that tariff refunds recognized during the quarter reduced reported revenue while positively affecting operating income, margins, and earnings per share, which required non-GAAP adjustments. For the full year 2026, the company raised its revenue guidance by $30 million at the midpoint to between $4.64 billion and $4.66 billion and raised its diluted earnings per share guidance to between $5.40 and $5.45. The company also projected fourth-quarter revenue of $1.22 billion to $1.24 billion.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy Illumina? Access our full analysis report here, it’s free.
What is the market telling us
Illumina’s shares are very volatile and have had 21 moves greater than 5% over the last year. But moves this big are rare even for Illumina and indicate this news significantly impacted the market’s perception of the business.
The previous big move we wrote about was 25 days ago when the stock gained 7.7% on the news that Wall Street analysts lifted their price targets due to an expected improvement in clinical sales and new catalysts, while market participants increasingly viewed the company’s gene-sequencing technology as infrastructure for artificial intelligence applications as reported by TipRanks. Analysts increased their price targets based on projected improvements in clinical sales and potential upcoming catalysts for the business.
Gene-sequencing technology determines the genetic sequence of organisms, and investors increasingly consider genomic data generation as foundational infrastructure for artificial intelligence applications. Higher price targets from Wall Street analysts indicate expectations that the stock will trade at higher valuation levels.
Illumina is up 75% since the beginning of the year, but at $235.11 per share, it is still trading 19.9% below its 52-week high of $293.69 from October 2026. Despite the year-to-date gain, investors who bought $1,000 worth of Illumina’s shares 5 years ago would now be looking at only $564.08.
