Critical Analysis: IRIDEX Corporation (IRIX) vs. Illumina (ILMN)

IRIDEX Corporation (NASDAQ: IRIX) and Illumina (NASDAQ:ILMN) are both computer and technology companies, but which is the superior stock? We will compare the two companies based on the strength of their analyst recommendations, earnings, profitability, valuation, risk, institutional ownership and dividends.

Insider and Institutional Ownership

47.5% of IRIDEX Corporation shares are held by institutional investors. Comparatively, 93.3% of Illumina shares are held by institutional investors. 5.0% of IRIDEX Corporation shares are held by insiders. Comparatively, 1.6% of Illumina shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Volatility & Risk

IRIDEX Corporation has a beta of 1.29, meaning that its share price is 29% more volatile than the S&P 500. Comparatively, Illumina has a beta of 0.81, meaning that its share price is 19% less volatile than the S&P 500.

Profitability

This table compares IRIDEX Corporation and Illumina’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
IRIDEX Corporation -37.62% -16.87% -13.86%
Illumina 30.27% 19.69% 10.81%

Analyst Ratings

This is a summary of current ratings and target prices for IRIDEX Corporation and Illumina, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
IRIDEX Corporation 0 0 1 0 3.00
Illumina 2 8 9 0 2.37

IRIDEX Corporation presently has a consensus price target of $20.00, indicating a potential upside of 123.96%. Illumina has a consensus price target of $173.56, indicating a potential downside of 18.23%. Given IRIDEX Corporation’s stronger consensus rating and higher probable upside, equities analysts clearly believe IRIDEX Corporation is more favorable than Illumina.

Valuation and Earnings

This table compares IRIDEX Corporation and Illumina’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
IRIDEX Corporation $42.80 million 2.41 -$5.81 million ($1.51) -5.91
Illumina $2.49 billion 12.44 $666.78 million $5.10 41.62

Illumina has higher revenue and earnings than IRIDEX Corporation. IRIDEX Corporation is trading at a lower price-to-earnings ratio than Illumina, indicating that it is currently the more affordable of the two stocks.

Summary

Illumina beats IRIDEX Corporation on 9 of the 13 factors compared between the two stocks.

IRIDEX Corporation Company Profile

IRIDEX Corporation is a provider of therapeutic based laser consoles, delivery devices and consumable instrumentation used to treat sight-threatening eye diseases in ophthalmology. The Company operates through ophthalmology segment. Its ophthalmology products consist of laser consoles, delivery devices and consumable instrumentation, including laser probes, and are used in the treatment of serious eye diseases, including the over three causes of irreversible blindness, such as diabetic retinopathy, glaucoma and age-related macular degeneration (AMD). In addition, the Company’s ophthalmology products are often used in vitrectomy procedures (used to treat proliferative diabetic retinopathy, macular holes, retinal tears and detachments), which are generally performed in the operating room and require a consumable single use intraocular laser probe (EndoProbe) to deliver light to the back of the eye together with other instrumentation.

Illumina Company Profile

Illumina, Inc. (Illumina) is a provider of sequencing- and array-based solutions for genetic analysis. The Company operates through two segments: Core Illumina and the consolidated variable interest entities (VIEs), which include the activities of GRAIL, Inc. (GRAIL) and Helix Holdings I, LLC (Helix). Core Illumina consists of its core operations. Core Illumina’s products and services serve customers in the research, clinical and applied markets, and enable the adoption of a range of genomic solutions. The Company’s portfolio of integrated systems, consumables and analysis tools addresses the range of genomic complexity, price points, and throughput, enabling customers to select the solution for their research or clinical challenge. The Company provides reproductive-health solutions, including noninvasive prenatal testing (NIPT), preimplantation genetic screening and diagnosis, and neonatal and genetic health testing.

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