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Illumina Inc ILMN

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Stock XNAS Rating as of
$109.79 +7.84 (7.69%)
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Company Report

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Illumina Earnings: Internal and External Challenges Weigh on Its Fair Value Estimate

Julie Utterback

Narrow-moat Illumina's third-quarter results exceeded profit expectations, but a challenging macroenvironment in life sciences and instrument transition issues cut into management's 2023 guidance again and led to a much lower initial view for 2024 than we were expecting. With a continued delay of normalized growth patterns for its legacy business and the potential for Illumina to realize a lower Grail valuation than we believe it deserves if forced to divest it in late 2024, we are lowering our fair value estimate on Illumina by 15% to $228 per share from $269 previously. Shares remain steeply discounted to fair value, however.

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Price vs Fair Value

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ILMN is trading within a range we consider fairly valued.
Price
$109.78
Fair Value
$718.00
Uncertainty
High
1-Star Price
$435.80
5-Star Price
$292.40
Economic Moat
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Capital Allocation
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Bulls Say, Bears Say

Bulls

Genomic sequencing remains a relatively early stage market, and expanding sequencing indications, including the nascent liquid biopsy applications, create large growth opportunities for Illumina's operations.

Bears

Disruptive technology risks could threat Illumina's industry-leading sequencing platform, leading to market share losses and profit declines.

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Trading Information

Previous Close Price
$101.95
Day Range
$100.19–110.58
52-Week Range
$89.00–238.55
Bid/Ask
$109.01 / $110.23
Market Cap
$17.43 Bil
Volume/Avg
4.1 Mil / 2.4 Mil

Key Statistics

Price/Earnings (Normalized)
126.20
Price/Sales
3.88
Dividend Yield
—
Dividend Yield (Forward)
—
Total Yield
—

Company Profile

Illumina provides tools and services to analyze genetic material with life science and clinical lab applications. The company generates about 90% of its revenue from sequencing instruments, consumables, and services. Illumina’s high-throughput technology enables whole genome sequencing in humans and other large organisms. Its lower throughput tools enable applications that require smaller data outputs, such as viral and cancer tumor screening. Illumina also sells microarrays (about 10% of sales) that enable lower-cost, focused genetic screening with primarily consumer and agricultural applications.
Sector
Healthcare
Industry
Diagnostics & Research
Stock Style Box
Mid Value
Total Number of Employees
10,260
Website
https://www.illumina.com

Competitors

Valuation

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Metric
ILMN
GH
EXAS
Price/Earnings (Normalized)
 126.20——
Price/Book Value
 2.9513.593.88
Price/Sales
 3.885.314.99
Price/Cash Flow
 29.71—123.56
Price/Earnings
ILMN
GH
EXAS

Financial Strength

Metric
ILMN
GH
EXAS
Quick Ratio
 1.105.481.96
Current Ratio
 1.695.942.41
Interest Coverage
 −16.24−175.231.89
Quick Ratio
ILMN
GH
EXAS

Profitability

Metric
ILMN
GH
EXAS
Return on Assets (Normalized)
 1.20%−23.40%−130.44%
Return on Equity (Normalized)
 2.11%−281.51%−268.00%
Return on Invested Capital (Normalized)
 1.58%−27.39%2.24%
Return on Assets
ILMN
GH
EXAS

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