Year to date, shares of Illumina (ILMN - Get Report) are down 27%. The company has experienced two major earnings shortfalls that have left investors shaken. Can this diagnostic equipment maker return to health?

The company reports third-quarter fiscal 2016 earnings on Nov. 1.

Illumina makes some of the most impressive (and expensive) genomic diagnostic equipment on the planet. The company's $10 million Hi SeqX Ten machine can sequence 16 people's DNA in three days for $1,000 per genome. It can sequence 18,000 human genomes a year. The company has reportedly sold 35 of the  machines to the biggest research labs in the world. Analysts estimate the company has 70% market share in genomics research.

Illumina's equipment has quickly become a vital tool for genomic researchers in oncology, reproductive health, forensics and agrigenomics.

On April 18, the company preannounced lower-than-expected first-quarter fiscal 2016 results. Revenue estimates were cut by $21 million to $572 million. Full-year sales growth guidance was cut from 16% to just 12%. Management blamed Europe for the slowdown.

The shortfall came from slowing sales of the HiSeq 4000, which costs an estimated $1 million. Apparently, labs that are tight on money are renting time on HiSeqX Ten machines, instead of laying out the money to purchase their own machines.

After the April shortfall, investors jumped right back into the stock. In July, the company reported better-than-expected second-quarter sales, and it was back to the races. The stock ran up 36% before getting knocked back down on Oct. 10 after the company chopped third-quarter and fourth-quarter estimates well below the consensus. The shares fell 25%.

The company preannounced the third quarter. Management expects revenue of $607 million, up 10%, which is about $18 million less than expected. As a result of the third-quarter shortfall, the fourth quarter is expected to be slightly up to flat sequentially.

The fourth-quarter estimate cut really stunned investors, who were anticipating sales of $684 million, not $607 million. The company said the miss was related to "weakness in its high-throughput sequencing instruments." That implies the shortfall is coming from the U.S., and not Europe or China. That's the most troubling part.

U.S. labs have been gobbling up these machines for 10 years. Now it seems the company has hit a wall. The vast majority of the HiSeqX Ten machines are in the U.S. Investors thought U.S. labs would keep the streak alive. But it doesn't seem that way.

The new estimates imply fiscal 2016 sales will be up just 8% vs. prior guidance of 12%. This was the company's third negative preannouncement in five quarters.

In the past, I have been very bullish on shares of Illumina. With these cuts, it looks like Illumina will report earnings of $3.37 per share for 2016 and $3.90 per share for 2017. The stock trades at 36 times 2017 estimates. That's a very high multiple for a company that hasn't been able to estimates sales correctly.

I still love the company and its technology, but I would avoid the shares until I was more confident in management's ability to forecast sales.

This article is commentary by an independent contributor. At the time of publication, the author held no positions in the stocks mentioned.