Critical Survey: OmniAb (NASDAQ:OABI) versus Illumina (NASDAQ:ILMN)

Illumina (NASDAQ:ILMN) and OmniAb (NASDAQ:OABI) are both healthcare companies, but which is the superior stock? We will contrast the two companies based on the strength of their earnings, risk, profitability, dividends, valuation, analyst recommendations and institutional ownership.

Institutional and Insider Ownership

89.4% of Illumina shares are owned by institutional investors. Comparatively, 72.1% of OmniAb shares are owned by institutional investors. 2.9% of Illumina shares are owned by company insiders. Comparatively, 9.8% of OmniAb shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Risk and Volatility

Illumina has a beta of 1.41, indicating that its stock price is 41% more volatile than the S&P 500. Comparatively, OmniAb has a beta of 0.6, indicating that its stock price is 40% less volatile than the S&P 500.

Analyst Ratings

This is a summary of recent recommendations for Illumina and OmniAb, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Illumina	2	6	10	0	2.44
OmniAb	1	0	3	0	2.50

Illumina presently has a consensus price target of $222.19, suggesting a potential downside of 15.02%. OmniAb has a consensus price target of $11.50, suggesting a potential upside of 150.00%. Given OmniAb’s stronger consensus rating and higher probable upside, analysts clearly believe OmniAb is more favorable than Illumina.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Illumina	18.36%	29.84%	12.17%
OmniAb	-115.12%	-16.59%	-14.82%

Earnings & Valuation

This table compares Illumina and OmniAb”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Illumina	$4.34 billion	9.09	$850.00 million	$5.36	48.78
OmniAb	$18.67 million	35.67	-$64.78 million	($0.36)	-12.78

Illumina has higher revenue and earnings than OmniAb. OmniAb 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 OmniAb on 10 of the 14 factors compared between the two stocks.

About Illumina

Illumina, Inc. offers sequencing- and array-based solutions for genetic and genomic analysis in the United States, Singapore, the United Kingdom, and internationally. It operates through Core Illumina and GRAIL segments. The company offers sequencing and array-based instruments and consumables, which include reagents, flow cells, and library preparation; whole-genome sequencing kits, which sequence entire genomes of various size and complexity; and targeted resequencing kits, which sequence exomes, specific genes, and RNA or other genomic regions of interest. It also provides whole-genome sequencing, genotyping, noninvasive prenatal testing, and product support services; and Galleri, a multi-cancer early detection test. In addition, the company is developing solutions to help accelerate cancer diagnoses, blood-based detection for minimal residual disease, and other post-diagnostic applications. The company serves genomic research centers, academic institutions, government laboratories, and hospitals, as well as pharmaceutical, biotechnology, commercial molecular diagnostic laboratories, and consumer genomics companies. It markets and distributes its products directly to customers, as well as through life-science distributors. Illumina, Inc. was incorporated in 1998 and is based in San Diego, California.

About OmniAb

OmniAb, Inc., a biotechnology company, engages in the discovery and provision of therapeutic antibody discovery technologies in the United States. The company's technology platform creates and screens diverse antibody repertoires and identify optimal antibodies for partners' drug development efforts. Its OmniAb platform is the biological intelligence of proprietary transgenic animals, including OmniRat, OmniChicken, and OmniMouse that have been genetically modified to generate antibodies with human sequences to facilitate development of human therapeutic candidates. The company's OmniFlic, a bispecific rat, and OmniClic, a bispecific chicken, designed for discovery of bispecific antibody applications; OmniTaur, which provides unique structural characteristics of cow antibodies for complex targets; and OmniDeep, a suite of in silico, an AI and machine learning tools for therapeutic discovery and optimization through various technologies and capabilities. OmniAb, Inc. was founded in 2012 and is headquartered in Emeryville, California.