Overall ILMN gets a fundamental rating of 6 out of 10. We evaluated ILMN against 58 industry peers in the Life Sciences Tools & Services industry. While ILMN belongs to the best of the industry regarding profitability, there are some minor concerns on its financial health. ILMN has a correct valuation and a medium growth rate.

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1. Profitability

2. Health

3. Growth

4. Valuation

5. Dividend

1. Profitability

1.1 Basic Checks

ILMN had positive earnings in the past year.
ILMN had a positive operating cash flow in the past year.
In multiple years ILMN reported negative net income over the last 5 years.
In the past 5 years ILMN always reported a positive cash flow from operatings.

1.2 Ratios

ILMN has a better Return On Assets (11.38%) than 91.38% of its industry peers.
ILMN has a Return On Equity of 29.53%. This is amongst the best in the industry. ILMN outperforms 96.55% of its industry peers.
ILMN has a better Return On Invested Capital (16.40%) than 91.38% of its industry peers.

		Industry Rank	Sector Rank
ROA	11.38%
ROE	29.53%
ROIC	16.4%

ROA(3y)-22.28%

ROA(5y)-10.63%

ROE(3y)-46.16%

ROE(5y)-23.48%

ROIC(3y)N/A

ROIC(5y)N/A

1.3 Margins

With an excellent Profit Margin value of 16.39%, ILMN belongs to the best of the industry, outperforming 89.66% of the companies in the same industry.
The Operating Margin of ILMN (20.41%) is better than 86.21% of its industry peers.
In the last couple of years the Operating Margin of ILMN has declined.
With an excellent Gross Margin value of 66.74%, ILMN belongs to the best of the industry, outperforming 87.93% of the companies in the same industry.
In the last couple of years the Gross Margin of ILMN has remained more or less at the same level.

		Industry Rank	Sector Rank
OM	20.41%
PM (TTM)	16.39%
GM	66.74%

OM growth 3YN/A

OM growth 5Y-11.47%

PM growth 3YN/A

PM growth 5YN/A

GM growth 3Y-2.07%

GM growth 5Y-1.23%

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ROA

ROE

ROIC

Operating and Profit Margin

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2. Health

2.1 Basic Checks

The Return on Invested Capital (ROIC) is just above the Cost of Capital (WACC), so ILMN is still creating some value.
Compared to 1 year ago, ILMN has about the same amount of shares outstanding.
Compared to 5 years ago, ILMN has more shares outstanding
ILMN has a worse debt/assets ratio than last year.

2.2 Solvency

ILMN has an Altman-Z score of 4.78. This indicates that ILMN is financially healthy and has little risk of bankruptcy at the moment.
ILMN has a better Altman-Z score (4.78) than 81.03% of its industry peers.
ILMN has a debt to FCF ratio of 1.99. This is a very positive value and a sign of high solvency as it would only need 1.99 years to pay back of all of its debts.
Looking at the Debt to FCF ratio, with a value of 1.99, ILMN belongs to the top of the industry, outperforming 87.93% of the companies in the same industry.
A Debt/Equity ratio of 0.42 indicates that ILMN is not too dependend on debt financing.
ILMN has a Debt to Equity ratio of 0.42. This is in the lower half of the industry: ILMN underperforms 60.34% of its industry peers.
Although ILMN does not score too well on debt/equity it has very limited outstanding debt, which is well covered by the FCF. We will not put too much weight on the debt/equity number as it may be because of low equity, which could be a consequence of a share buyback program for instance. This needs to be investigated.

		Industry Rank	Sector Rank
Debt/Equity	0.42
Debt/FCF	1.99
Altman-Z	4.78

ROIC/WACC1.5

WACC10.95%

2.3 Liquidity

A Current Ratio of 1.43 indicates that ILMN should not have too much problems paying its short term obligations.
The Current ratio of ILMN (1.43) is worse than 77.59% of its industry peers.
ILMN has a Quick Ratio of 1.12. This is a normal value and indicates that ILMN is financially healthy and should not expect problems in meeting its short term obligations.
ILMN has a worse Quick ratio (1.12) than 68.97% of its industry peers.

		Industry Rank	Sector Rank
Current Ratio	1.43
Quick Ratio	1.12

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WACC

Debt/Equity

How to determine the health of a company

Altman-Z score

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3. Growth

3.1 Past

ILMN shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 152.02%, which is quite impressive.
Measured over the past years, ILMN shows a very negative growth in Earnings Per Share. The EPS has been decreasing by -17.93% on average per year.
Looking at the last year, ILMN shows a decrease in Revenue. The Revenue has decreased by -2.32% in the last year.
Measured over the past years, ILMN shows a small growth in Revenue. The Revenue has been growing by 4.29% on average per year.

EPS 1Y (TTM)152.02%

EPS 3Y-25.65%

EPS 5Y-17.93%

EPS Q2Q%17.54%

Revenue 1Y (TTM)-2.32%

Revenue growth 3Y-1.15%

Revenue growth 5Y4.29%

Sales Q2Q%0.37%

3.2 Future

Based on estimates for the next years, ILMN will show a very strong growth in Earnings Per Share. The EPS will grow by 24.95% on average per year.
ILMN is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 3.99% yearly.

EPS Next Y96.09%

EPS Next 2Y45.34%

EPS Next 3Y33.76%

EPS Next 5Y24.95%

Revenue Next Year-0.88%

Revenue Next 2Y0.94%

Revenue Next 3Y2.71%

Revenue Next 5Y3.99%

3.3 Evolution

When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is stable.

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4. Valuation

4.1 Price/Earnings Ratio

The Price/Earnings ratio is 34.37, which means the current valuation is very expensive for ILMN.
60.34% of the companies in the same industry are more expensive than ILMN, based on the Price/Earnings ratio.
When comparing the Price/Earnings ratio of ILMN to the average of the S&P500 Index (28.60), we can say ILMN is valued slightly more expensively.
Based on the Price/Forward Earnings ratio of 28.96, the valuation of ILMN can be described as expensive.
ILMN's Price/Forward Earnings ratio is a bit cheaper when compared to the industry. ILMN is cheaper than 72.41% of the companies in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 25.83. ILMN is around the same levels.

		Industry Rank	Sector Rank
PE	34.37
Fwd PE	28.96

4.2 Price Multiples

77.59% of the companies in the same industry are more expensive than ILMN, based on the Enterprise Value to EBITDA ratio.
Based on the Price/Free Cash Flow ratio, ILMN is valued cheaper than 86.21% of the companies in the same industry.

		Industry Rank	Sector Rank
P/FCF	22.9
EV/EBITDA	20.33

4.3 Compensation for Growth

The low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
ILMN has a very decent profitability rating, which may justify a higher PE ratio.
ILMN's earnings are expected to grow with 33.76% in the coming years. This may justify a more expensive valuation.