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 has a decent growth rate and is not valued too expensively.

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.
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.
Looking at the Return On Equity, with a value of 29.53%, ILMN belongs to the top of the industry, outperforming 96.55% of the companies in the same industry.
With an excellent Return On Invested Capital value of 16.40%, ILMN belongs to the best of the industry, outperforming 91.38% of the companies in the same industry.

		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.
ILMN's Operating Margin of 20.41% is amongst the best of the industry. ILMN outperforms 86.21% of its industry peers.
In the last couple of years the Operating Margin of ILMN has declined.
ILMN has a better Gross Margin (66.74%) than 87.93% of its industry peers.
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.
ILMN has about the same amout of shares outstanding than it did 1 year ago.
The number of shares outstanding for ILMN has been increased compared to 5 years ago.
The debt/assets ratio for ILMN is higher compared to a year ago.

2.2 Solvency

An Altman-Z score of 4.85 indicates that ILMN is not in any danger for bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 4.85, ILMN belongs to the top 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.
ILMN has a Debt/Equity ratio of 0.42. This is a healthy value indicating a solid balance between debt and equity.
The Debt to Equity ratio of ILMN (0.42) is worse than 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	4.85

ROIC/WACC1.5

WACC10.95%

2.3 Liquidity

ILMN has a Current Ratio of 1.43. This is a normal value and indicates that ILMN is financially healthy and should not expect problems in meeting its short term obligations.
With a Current ratio value of 1.43, ILMN is not doing good in the industry: 77.59% of the companies in the same industry are doing better.
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 Quick ratio of 1.12. This is in the lower half of the industry: ILMN underperforms 68.97% of its industry peers.

		Industry Rank	Sector Rank
Current Ratio	1.43
Quick Ratio	1.12

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3. Growth

3.1 Past

The Earnings Per Share has grown by an impressive 152.02% over the past year.
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

ILMN is expected to show a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 24.95% yearly.
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

The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
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 34.88, which means the current valuation is very expensive for ILMN.
Compared to the rest of the industry, the Price/Earnings ratio of ILMN indicates a somewhat cheap valuation: ILMN is cheaper than 60.34% of the companies listed in the same industry.
When comparing the Price/Earnings ratio of ILMN to the average of the S&P500 Index (28.87), we can say ILMN is valued slightly more expensively.
Based on the Price/Forward Earnings ratio of 29.39, 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 70.69% of the companies in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 25.96. ILMN is around the same levels.

		Industry Rank	Sector Rank
PE	34.88
Fwd PE	29.39

4.2 Price Multiples

Based on the Enterprise Value to EBITDA ratio, ILMN is valued a bit cheaper than the industry average as 77.59% of the companies are valued more expensively.
ILMN's Price/Free Cash Flow ratio is rather cheap when compared to the industry. ILMN is cheaper than 87.93% of the companies in the same industry.

		Industry Rank	Sector Rank
P/FCF	23.24
EV/EBITDA	20.75

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.
The decent profitability rating of ILMN may justify a higher PE ratio.
A more expensive valuation may be justified as ILMN's earnings are expected to grow with 33.76% in the coming years.