Taking everything into account, ILMN scores 6 out of 10 in our fundamental rating. ILMN was compared to 58 industry peers in the Life Sciences Tools & Services industry. While ILMN has a great profitability rating, there are some minor concerns on its financial health. ILMN is not valued too expensively and it also shows a decent growth rate.

Quickly go to:

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.
The reported net income has been mixed in the past 5 years: ILMN reported negative net income in multiple years.
ILMN had a positive operating cash flow in each of the past 5 years.

1.2 Ratios

Looking at the Return On Assets, with a value of 11.38%, ILMN belongs to the top of the industry, outperforming 91.38% of the companies in the same industry.
ILMN has a better Return On Equity (29.53%) than 96.55% of its industry peers.
The Return On Invested Capital of ILMN (16.40%) is better 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

Looking at the Profit Margin, with a value of 16.39%, ILMN belongs to the top of the industry, outperforming 89.66% of the companies in the same industry.
Looking at the Operating Margin, with a value of 20.41%, ILMN belongs to the top of the industry, outperforming 86.21% of the companies in the same industry.
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.
ILMN's Gross Margin has been stable in the last couple of years.

		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

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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
The debt/assets ratio for ILMN is higher compared to a year ago.

2.2 Solvency

An Altman-Z score of 4.77 indicates that ILMN is not in any danger for bankruptcy at the moment.
With an excellent Altman-Z score value of 4.77, ILMN belongs to the best of the industry, outperforming 81.03% of the companies in the same industry.
The Debt to FCF ratio of ILMN is 1.99, which is an excellent value as it means it would take ILMN, only 1.99 years of fcf income to pay off all of its debts.
ILMN's Debt to FCF ratio of 1.99 is amongst the best of the industry. ILMN outperforms 87.93% of its industry peers.
A Debt/Equity ratio of 0.42 indicates that ILMN is not too dependend on debt financing.
ILMN's Debt to Equity ratio of 0.42 is on the low side compared to the rest of the industry. ILMN is outperformed by 60.34% of its industry peers.
Even though the debt/equity ratio score it not favorable for ILMN, it has very limited outstanding debt, so we won't put too much weight on the DE evaluation.

		Industry Rank	Sector Rank
Debt/Equity	0.42
Debt/FCF	1.99
Altman-Z	4.77

ROIC/WACC1.5

WACC10.92%

2.3 Liquidity

A Current Ratio of 1.43 indicates that ILMN should not have too much problems paying its short term obligations.
ILMN has a Current ratio of 1.43. This is in the lower half of the industry: ILMN underperforms 77.59% of its industry peers.
A Quick Ratio of 1.12 indicates that ILMN should not have too much problems paying its short term obligations.
The Quick ratio of ILMN (1.12) is worse 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

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Altman-Z score

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3. Growth

3.1 Past

The Earnings Per Share has grown by an impressive 152.02% over the past year.
ILMN shows a very negative growth in Earnings Per Share. Measured over the last years, the EPS has been decreasing by -17.93% yearly.
Looking at the last year, ILMN shows a decrease in Revenue. The Revenue has decreased by -2.32% in the last year.
The Revenue has been growing slightly by 4.29% on average over the past years.

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

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

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 33.21, 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.
ILMN is valuated at similar levels of the S&P average when we compare the Price/Earnings ratio to 28.30, which is the current average of the S&P500 Index.
A Price/Forward Earnings ratio of 27.98 indicates a quite expensive valuation of ILMN.
ILMN's Price/Forward Earnings ratio is a bit cheaper when compared to the industry. ILMN is cheaper than 68.97% of the companies in the same industry.
When comparing the Price/Forward Earnings ratio of ILMN to the average of the S&P500 Index (25.57), we can say ILMN is valued inline with the index average.

		Industry Rank	Sector Rank
PE	33.21
Fwd PE	27.98

4.2 Price Multiples

ILMN's Enterprise Value to EBITDA ratio is a bit cheaper when compared to the industry. ILMN is cheaper than 77.59% of the companies in the same industry.
86.21% of the companies in the same industry are more expensive than ILMN, based on the Price/Free Cash Flow ratio.

		Industry Rank	Sector Rank
P/FCF	22.13
EV/EBITDA	20.31

4.3 Compensation for Growth

ILMN's 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.