Wells Fargo’s Best Growth Stocks: 28 Stocks With The Highest Consensus EPS Growth Estimates

1. Illumina, Inc. (NASDAQ:ILMN)

Consensus Long-Term EPS Growth Estimate: 54%

Number of Hedge Fund Holders: 56

Illumina, Inc. (NASDAQ:ILMN) is a medical products provider that sells consumables, sequencing instruments, and other products to the gene testing industry. This makes it a niche player, and with it, introduces a host of pros and cons. Illumina, Inc. (NASDAQ:ILMN)’s shares are down 2.25% year to date due to constrained spending in the pharmaceutical industry. Since it is a specialty firm, the firm enjoys a wide moat in its industry of providing products to gene testing firms. Yet, this also means that it isn’t insulated against spending drops in its target industry. The dependence is also the reason why Illumina, Inc. (NASDAQ:ILMN)’s shares are down by 14.8% since its third-quarter earnings. The earnings saw the firm increase its 2024 revenue drop guidance to 3% annually from an earlier 2%. Consequently, much of the narrative is built on a recovery in the gene industry.

Artisan Partners mentioned Illumina, Inc. (NASDAQ:ILMN) in its Q3 2024 investor letter. Here is what the fund said:

“Notable adds in the quarter included Samsara, Illumina, Inc. (NASDAQ:ILMN) and Onto Innovation. Illumina is a leading provider of next-generation sequencing instruments for genetic testing. As costs have fallen, genome sequencing has become more mainstream, expanding within academic research and beyond into high-value clinical diagnostic testing applications. The company has gone through a difficult few years after an unwise acquisition of Grail (a company that develops blood tests designed to detect cancers), a difficult transition to a new sequencing system and significant margin contraction. However, new management has focused on controlling costs, has spun out Grail and, in our view, is putting the company back on a path of sustainable growth. With a stock price that we do not believe reflects Illumina’s value as a unique life science tools franchise, we continue to build our GardenSM position.”

ILMN is a stock with high projected EPS growth according to Wells Fargo. While we acknowledge the potential of ILMN as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than ILMN but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

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