One-glance verdict
Overvalued
$112.94 our estimate vs market $223.07
Wall Street consensus: $202.65 (79.4% higher than our fair-value estimate)
98% above our estimate, beyond the bull case
Fundamentals snapshot
Illumina, Inc.
ILMN · NMS · Healthcare · Diagnostics & Research
Current price
$223.07
52-week range
$88.00 - $231.81
Market cap
$33.68B
Balance sheet
Watch
8.09x Adequate
Net debt $1.36B. Interest coverage shows how many times profit covers the interest bill.
What stands out
2 Rewards
1 Risk
2 rewards · 1 risks
- Reward Revenue grew 3.5% last year.
- Reward Free cash flow was positive in 10/10 years.
- Risk Stock trades 73.3% above its 5-year average P/E.
What this company does
Illumina, Inc.
Illumina makes the machines and the necessary chemical kits that read DNA, which is the instruction manual for all living things. The company makes money selling the machines, but a larger, more consistent part of their sales comes from the single-use kits that customers must buy again and again to run tests, creating a stream of recurring revenue (predictable income from repeat customers). This technology is essential for medical research, disease detection, and the development of new drugs and personalized treatments.
How the company got here
Illumina was founded in 1998 by a team of scientists and venture capitalists who saw the potential in a new technology for analyzing DNA. A key turning point was their acquisition of a company called Solexa in 2007, which gave them the core technology for what's known as next-generation sequencing. This technology made it dramatically faster and cheaper to read a person's genetic code, establishing Illumina's dominance in the field. Over the years, they have grown by making their sequencing machines, which are like powerful DNA readers, essential tools for researchers and labs worldwide.
What it actually does
Illumina makes and sells machines and related products that read and analyze DNA, a process called genetic sequencing. Think of it like a very advanced scanner that can read the unique instruction manual (the genome) inside every living thing. This allows scientists and doctors to find tiny variations in DNA that can be related to diseases like cancer, or used in areas like agriculture and forensics. Their customers are typically research universities, pharmaceutical companies, and specialized laboratories that use this genetic information for discovery and diagnostics.
Core Illumina - Consumables
This is the company's largest and most profitable business, making up the vast majority of its revenue. After a lab buys an Illumina sequencing machine, they must continuously purchase special chemical kits and reagents (the 'consumables') from Illumina to actually run the tests. It's similar to a razor-and-blade model, where the initial machine purchase leads to ongoing, recurring sales of the necessary supplies. These consumables are specific to Illumina's machines, which keeps customers coming back.
Core Illumina - Instruments and Services
This part of the business involves selling the actual DNA sequencing machines and providing support for them. The machines range from smaller, desktop models to very large, high-powered systems designed for major research centers. This segment also includes services like instrument maintenance, training for lab technicians, and product support to ensure the complex equipment runs smoothly. While not as large as the consumables business, selling new and upgraded instruments is crucial for expanding the company's footprint and driving future consumable sales.
What management is betting on now
Management is focused on making its sequencing technology even more powerful and easier to use, aiming to make it a routine part of healthcare. A major priority is to get more customers to adopt their newest and most powerful sequencing machine, the NovaSeq X, which drives sales of higher-margin consumables. They are also investing in what's called 'multiomics,' which involves analyzing not just DNA but other molecules like RNA and proteins to get a more complete picture of biology. The overall goal is to move beyond just selling tools for research and become more integrated into clinical settings for diagnosing diseases.
Price history
How the share price has moved
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Earnings history
Last 8 quarters — what happened
Click any quarter to read the call summary and what the numbers say.
FY2024 Q3
$284.00M
FY2024 Q4
$335.00M
FY2025 Q1
$208.00M
FY2025 Q2
$204.00M
FY2025 Q3
$253.00M
FY2025 Q4
$266.00M
FY2026 Q1
$251.00M
FY2026 Q2
$161.00M
Revenue
$1.16B
Net income
$207.00M
Diluted EPS
1.35
Operating cash flow
$201.00M
Free cash flow
$161.00M
Fetching…
Sources
Revenue
$1.09B
Net income
$134.00M
Diluted EPS
0.87
Operating cash flow
$289.00M
Free cash flow
$251.00M
Fetching…
Sources
Revenue
$1.16B
Net income
$334.00M
Diluted EPS
2.16
Operating cash flow
$321.00M
Free cash flow
$266.00M
Fetching…
Sources
Revenue
$1.08B
Net income
$150.00M
Diluted EPS
0.98
Operating cash flow
$284.00M
Free cash flow
$253.00M
Fetching…
Sources
Revenue
$1.06B
Net income
$235.00M
Diluted EPS
1.49
Operating cash flow
$234.00M
Free cash flow
$204.00M
Fetching…
Sources
Revenue
$1.04B
Net income
$131.00M
Diluted EPS
0.82
Operating cash flow
$240.00M
Free cash flow
$208.00M
Fetching…
Sources
Revenue
$1.10B
Net income
$186.00M
Diluted EPS
1.16
Operating cash flow
$364.00M
Free cash flow
$335.00M
Fetching…
Sources
Revenue
$1.08B
Net income
$705.00M
Diluted EPS
4.42
Operating cash flow
$316.00M
Free cash flow
$284.00M
Fetching…
Sources
Is it cheap or expensive?
Fair value $112.94 vs current price $223.07
Wall Street consensus is the average analyst price target: $202.65 (79.4% higher than our fair-value estimate).
Our most-likely fair value is $112.94 a share — about 49.4% below today's price of $223.07, so the stock currently looks expensive (overvalued).
Is it drowning in debt?
Watch
Net debt $1.4B. Interest coverage 8.1x.
Net debt
$1.36B
Interest coverage
8.09x
Illumina, Inc. is healthier than 0 of 1 peers on balance-sheet leverage.
Watch
Worse cushion
Baseline
Better cushion
ILMN
BASELINE
Illumina, Inc.
Total debt $2.53B Interest coverage 8.09x This is the baseline the peer rows are being compared against.
What you should know
The case for and against ILMN
2 Rewards
1 Risk
Rewards
-
Revenue grew 3.5% last year.
-
Free cash flow was positive in 10/10 years.
Risks
-
Stock trades 73.3% above its 5-year average P/E.
The numbers
All the key metrics, grouped by purpose
Tap any ? icon to learn what it means.
Valuation
How expensive the stock looks
P/E (TTM)
41.70x
Forward P/E
36.54x
P/B
11.87x
P/S
7.50x
EV/EBITDA
28.40x
PEG ratio
2.57x
Profitability
How much profit each dollar creates
Gross margin
67.9%
Operating margin
21.1%
Net margin
18.3%
ROE
32.3%
ROA
8.7%
Health
Liquidity and balance-sheet strength
Debt / equity
0.89x
Current ratio
1.80x
Quick ratio
1.25x
Total debt
$2.53B
Total cash
$1.17B
Growth
How the business has been compounding
Revenue TTM
$4.49B
Revenue 5Y CAGR
-1.0%
EPS TTM
5.35
EPS 5Y CAGR
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Cash flow
How much cash the business throws off
Operating CF TTM
$1.09B
Free CF TTM
$931.00M
FCF margin
20.7%
Dividend
Shareholder payout
Yield
—
Payout ratio
0.0%
Last ex-div date
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