Illumina (NASDAQ:ILMN) is a biotechnology company based right here in my home town of San Diego. The company manufactures life-science tools for gene sequencing used in disease research, drug development, and genetic testing. Illumina is a technology leader in an expanding market.

Illumina recently released their preliminary financial results for Q4 and the full year 2014 at the JP Morgan Healthcare Conference in San Francisco, and the results were pretty impressive. The company is scheduled to release its full results on January 27th.

Illumina’s Q4 revenues of $512 million are up 32% over last year’s quarter. The company also guided up earnings and gave revenue growth guidance for 2015 of 20%. This guidance is actually conservative relative to analyst estimates, but management has a reputation for being conservative with its guidance.

The market opportunity for genome sequencing is estimated to be in excess of $20 billion.

Technological advancements in gene sequencing have brought down the cost of assembling one genome from $3 billion and a time of 13 years by the completion of the Human Genome Project in 2003, to $1000 and a processing time of less than 3 days.

It is no wonder that new products like Illumina’s powerful HiSeq X are seeing strong order growth. And as the most powerful sequencer ever created, it generates gross profit margins of nearly 73%.

Due to their technological leadership, Illumina continues to gain share from other companies in the field such as Roche (OTCQX:RHHBY) and Thermo Fisher (NYSE:TMO). Illumina currently holds about 70% of the genome-sequencing machine market, accounting for more than 90% of all DNA data produced.

So let’s take a closer look at Illumina as an investment opportunity.

Not surprisingly, shares of Illumina are trading at near-high levels given its solid earnings and prospects for future growth.

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Illumina is a $26 billion market cap company which puts it in the large cap category. Its risk profile is Moderate.

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The stock does not look cheap using standard valuation measures, but given its 5 year annual growth rate of 25% and total return potential of 92%, its Value Grade still rates an A-.

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The stock looks impressive on a relative outperformance basis. Illumina returned almost 67% in 2014 after posting an almost 100% year in 2013. The stock’s Performance Grade is A+.

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Illumina currently ranks #190 out of the 3900+ stocks in the Best Stocks Now universe. It rates a Buy with its stock grade of A.

Illumina is not a stock tied to oil prices, employment, or the health of the overall economy. Understanding the human genome has the potential to be a game changer in medicine. Providing large-scale whole-genome sequencing for $1000/genome in just a few days paves the way for some amazing research and hopefully some important progress in the treatment of disease and genetic disorders.