Two elements favor the case for acquiring precision medicine stocks. First, the obvious point: barring extraordinary circumstances, the broader healthcare ecosystem will always be relevant. That is, humans will always try to find treatment solutions for various conditions and diseases. Second, the underlying sector will likely be a massive one based on expert projections.
According to Precedence Research, the precision medicine market size reached a valuation of $73.49 billion in 2022. By 2030, the sector is projected to reach a valuation of $175.64 billion. If so, that would imply a compound annual growth rate (CAGR) of 11.5%. Notably, in 2021, the North America market captured 43% of sector revenue.
Further, as technologies advance, government agencies will likely pour investment dollars into critical research and development. Over time, innovations can stack on top of each other, accelerating the underlying paradigm. With that, below are precision medicine stocks for the forward-looking investor.
Illumina (ILMN)
Falling under the diagnostics and research industry, Illumina (NASDAQ:ILMN) offers sequencing and array-based solutions for genetic and genomic analysis. Primarily, the company offers instruments and consumables, including reagents, flow cells and whole-genome sequencing kits. Fundamentally, it ranks among the top precision medicine stocks thanks to its underlying technologies. Researchers can use its various solutions for identifying genetic mutations and tailoring treatments to individual genetic profiles.
A key advantage that Illumina levers is its robust financial performance. In the past four quarters, the company posted an average earnings per share of 22 cents. This easily beat the collective consensus view of five cents, resulting in an earnings surprise of 600%. Granted, expectations will probably rise from here. Still, the print highlights the impressive nature of the healthcare specialist.
For fiscal 2024, analysts anticipate EPS of $4.04. That’s a blistering 370% higher than last year’s haul of only 86 cents. Now, revenue may take a slight dip by year’s end. However, by fiscal 2025, the top line could hit $4.72 billion. If so, that would be a noticeable bump from 2023’s result of $4.5 billion.
Guardant Health (GH)
Another entity in the diagnostics and research space, Guardant Health (NASDAQ:GH) bills itself as a precision oncology firm. Specifically, it provides blood and tissue tests, data sets and analytics. Thanks to its specialization in liquid biopsies, Guardant can analyze blood samples to detect cancer. It’s a relatively non-invasive approach, facilitating compelling innovations in early detection, monitoring and treatment guidance.
Financially, the company is a mixed bag. Right now, it’s having difficulty generating earnings. In the past four quarters, the company incurred a loss per share of 98 cents. Even worse, analysts had anticipated a loss of 96 cents per share.
On the positive end, during the trailing 12 months, the company posted revenue of $603.72 million. Further, in the most recent quarter, its year-over-year sales growth rate stood at 30.9%.
For fiscal 2024, analysts believe that the top line could hit $681.02 million. If so, that would imply a growth rate of 20.8% from the prior year. And in fiscal 2025, sales may rise another 19.6% to $814.64 million. Therefore, it’s an intriguing idea if you’re considering precision medicine stocks.
Adaptive Biotechnologies (ADPT)
Based in Seattle, Washington, Adaptive Biotechnologies (NASDAQ:ADPT) operates in the biotechnology sphere. Per its public profile, Adaptive is a commercial-stage enterprise developing an immune medicine platform for the diagnosis and treatment of multiple diseases. It’s one of the exciting players among precision medicine stocks thanks to its immune-driven diagnostics and therapies.
In addition to immunotherapy for the purpose of cancer diagnostics, Adaptive also specializes in infectious disease research. Given the enormous toll that Covid-19 imposed on society, interest in the latter category has increased significantly. However, the financial backdrop is a challenging one for ADPT stock. It’s still unprofitable, posting a loss per share of 37 cents during the past four quarters.
Nevertheless, the positive here is that ADPT stock carries a price-to-sales ratio of 3.51. During the prior year, the metric averaged around 4.55X. From this perspective, Adaptive could be considered relatively undervalued.
By year’s end, analysts believe that sales might dip slightly to $167.87 million. However, patient investors may be waiting for fiscal 2025, when experts anticipate that revenue will hit $205.56 million. That would be a significant step up from 2023’s haul of $170.28 million.
On the date of publication, Josh Enomoto did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
On the date of publication, the responsible editor did not have (either directly or indirectly) any positions in the securities mentioned in this article.
