15 Small-Cap Healthcare Stocks Hedge Funds Are Buying

4. Illumina, Inc. (NASDAQ:ILMN)

No. of Hedge Fund Holders: 61

Market Capitalization: $12.83 Billion

Analyst Upside: 23.18%

Illumina, Inc. (NASDAQ:ILMN) is a global healthcare firm engaged in providing sequencing and array-based solutions for genetic and genomic analysis. Illumina serves customers in various markets, allowing the adoption of genomic solutions in research and clinical settings.

Illumina, Inc. (NASDAQ:ILMN) had a promising development after the SEC dropped enforcement action on the company after concluding the investigation related to the acquisition of Grail in 2021. The company spun off Grail in 2024, following difficult times in which regulators had challenged the $8 billion takeover. This is a major development as the company can now fully focus on finding local partnerships to mitigate the Chinese ban, which has impacted Illumina’s sales by almost 7%.

On May 10, Daniel Arias from Stifel lowered the price target on ILMN from $160 to $135, maintaining a Buy rating on the shares. Arias pointed out the reduced full-year 2025 earnings guidance to be a key factor in lowering the price. Arias pointed out that the cut to the top line “was maybe a point or so deeper than we thought it might be, but the EPS outlook is better than the firm anticipated thanks to strong mitigation activities.” The management expects the EPS to be around $4.20 to $4.30, down from the previous guidance of $4.50 per share.