Biotech name Illumina (Illumina Stock Quote, Charts, News, Analysts, Financials NASDAQ:ILMN) is on sale at current levels, according to Darren Sissons, partner at Campbell, Lee & Ross, who thinks the recent pullback is a buying opportunity. But with the hate-on for technology stocks showing no signs of easing up, there could still be more downside to the stock. “Illumina is the global leader in DNA sequencing has a very high recurring revenue component of the business, something like 85 per cent of revenues, so think the razor blade model,” said Sissons, speaking on a BNN Bloomberg segment on Friday. San Diego-headquartered Illumina has gene sequencing and gene expression products and services used by companies and organizations such as Pharma, academic institutions and other biotech companies. A public company for now over two decades, having IPO’d in 2000, the now $38-billion market cap Illumina has been watching its share price fall steadily since last summer as the rout on tech and healthcare stocks did damage to the name. Want a sign of how strong the negative mood is on stocks like Illumina? Earlier this month, the company recorded solid top and bottom line results in its first quarter 2022 earnings but the stock dropped sharply nonetheless. Management even reaffirmed its revenue guidance for the 2022 year, calling for consolidated topline growth of between 14 and 16 per cent. The company’s outlook on earnings was altered, though, with Illumina guiding for GAAP earnings per diluted share of between $2.33 to $2.53 compared to the previous call for between $3.04 and $3.24 per share. (All figures in US dollars.) "We are seeing strength across our business as a growing number of patients around the world are accessing the life-saving benefits of genomics, from oncology therapy selection to genetic disease testing and pathogen surveillance," said CEO Francis deSouza in a May 6 press release. "Opportunities are also expanding across new markets like proteomics, infectious disease and drug discovery. In addition, momentum for Grail's groundbreaking multi-cancer early detection blood test continues to accelerate.” On Grail, the early cancer screening and blood testing company, Illumina had spun it out in 2015, but five years later Illumina announced plans to buy it back, saying the company’s multi-cancer screening test would be a gem in Illumina’s crown and sizeably increase its total addressable market. Yet the merger was challenged in 2021 by the US Federal Trade Commission on competition grounds, with the FTC arguing that the field of innovation in multi-cancer early detection (MCED) would be decreased by Illumina acquiring Grail and that the move would potentially make MCED testing more expensive. Illumina went ahead with the Grail acquisition anyway, against the wishes of both the FTC and the European Commission. The regulatory hangover remains, however, and ILMN is now down about a third since the start of April and down by 40 per cent over the past 12 months. Sissons thinks Illumin deserves a good look at these levels but he cautions that there’s no sign that the current pullback is nearing its end. “The stock itself is on sale for two reasons. Number one is they're having a fight with regulators over the acquisition of Grail. Effectively, that product was spun out and now it's being reacquired. European regulators believe that they have the right to opine on the acquisition when in fact the company was pre-revenue,” Sissons said. “The jury is out whether or not the Europeans regulators even have the ability to opine on that position at all that put a political risk on the stock. And then, obviously, with the selloff in the company has been hit somewhat,” he said. “So, at these levels it's actually very attractive. Management guided for 14 to 16 per cent revenue growth for the year and it's very strong cash regenerative business, so I'd say at these levels it's quite attractive,” Sissons said. “This is a tech company and a 70 per cent global market leader, but the problem we are seeing generally with tech is that there is no floor.” Illumina’s first quarter earnings saw the company hit revenue of $1.223 billion, up 12 per cent year-over-year, and non-GAAP EPS of $1.07 compared to $1.89 per share a year earlier. Analysts had been calling for revenue of $1.219 billion and earnings of $0.90 per share. The company’s gross margin slipped slightly from 69.9 per cent a year ago to 69.7 per cent, while its operating profit was $362 million compared to $193 million a year earlier. Illumina reported Grail’s financials separately, showing revenue of $10 million on an operating loss of $172 million. "Illumina maintained strong momentum in the first quarter, particularly across oncology therapy selection, genetic disease testing, and pathogen surveillance," said deSouza in a press release. "Our business fundamentals are robust. We saw record total orders and exited the quarter with record total backlog. GRAIL also continued to gain traction and has now entered more than 30 partnerships with health systems, employers, and insurers.