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ILMN

Illumina NasdaqGS:ILMN Stock Report

Last Price

US$190.79

Market Cap

US$30.0b

7D

0.2%

1Y

-51.7%

Updated

30 Sep, 2022

Data

Company Financials +
ILMN fundamental analysis
Snowflake Score
Valuation3/6
Future Growth4/6
Past Performance0/6
Financial Health5/6
Dividends0/6

ILMN Stock Overview

Illumina, Inc. provides sequencing and array-based solutions for genetic and genomic analysis.

Illumina, Inc. Competitors

Price History & Performance

Summary of all time highs, changes and price drops for Illumina
Historical stock prices
Current Share PriceUS$190.79
52 Week HighUS$428.00
52 Week LowUS$173.45
Beta1.16
1 Month Change-5.38%
3 Month Change-0.13%
1 Year Change-51.68%
3 Year Change-36.90%
5 Year Change-6.56%
Change since IPO874.12%

Recent News & Updates

Sep 29

Illumina Engages Obama To Push Its Customers' Reimbursement Agenda

Summary There is a high chance that the Illumina, Inc.-Grail deal would collapse after European regulators decide to block the acquisition. Without Grail, I believe Illumina will find it hard to maintain growth in light of disruptions in its end markets, namely the clinical gene testing sector. From a purely financial perspective, I believe that Illumina is overvalued. Illumina is hosting its inaugural Illumina Genomics Forum, tapping market influencers in an attempt to shape coverage and reimbursement policies for its consumer base. Investment Thesis Illumina, Inc. (ILMN) shares gained traction yesterday (Wednesday, Sept. 28) along with the market, rising 7.5% on above-average volume to $201 (the highest since the Fed's rate hike decision last week). Still, shares are down 47% year-to-date ("YTD"), underperforming the broader index, falling to mirror the rising prospects of a recession. On the surface, Illumina's ticker movement might seem irrational, given its exposure to defensive sectors like health care and its high revenue stability derived from its ink-and-cartilage business model. But a closer look at the company's fundamentals paints a different picture. Beyond valuation multiples contraction (mirroring changes in financial models, capital costs, currency, and all economic factors outside ILMN's control), rising interest rates directly affect the company's customers. As you probably know, one of the significant drivers of ILMN's financial performance is the growth in the molecular diagnostics market. However, the rising cost of capital affects its clientele, many of which are growth-oriented businesses that now face pressures to turn to profitability as the cost of money increases. One also can't ignore the impact of borrowing costs on general economic activity, including lab expansion decisions. We'll dive into details in the next section, but the main conclusion is that the decline in ILMN's stock is justified. Although the ticker might offer an opportunity as spreads narrow, rising interest rates directly impact the company's revenue in ways unique to its business model, as discussed in more detail below. Revenue Trends One of the advantages of ILMN's business model is that the company gets most of its revenue from consumables rather than from equipment. This removes the risk of obsolescence associated with older-generation technologies by smoothing out revenue predictability. Its gene sequencers are one of the most widely used in the industry and are a key component of any lab performing genetic tests. Clinical genetic diagnostics is a key area of growth for ILMN. A rising number of medical associations are beginning to recommend universal genetic screening for different diseases as more data emerge linking gene testing to health status. Establishing reimbursement pathways for laboratory testing can be a daunting task for healthcare providers and a major challenge for ILMN's customers, including Invitae (NASDAQ:NVTA), Myriad Genetics (NASDAQ:MYGN), EXACT Sciences (NASDAQ:EXAS) and Natera (NASDAQ:NTRA). Insurance is critical to ILMN's clinical lab customers, who have been pushing public and private payors to expand coverage to new Laboratory Developed Tests "LDT" for the better half of the past decade. This sentiment was captured during NTRA Q1 earnings call by an Analyst asking: Can you give us a refresher around how long it takes to earn coverage under an umbrella LCD and what that implies or how quickly you can start getting paid and from the new indications in oncology and transplant pursue? Stephanie Yan, Cowen The clinical gene testing industry has been engaged in pricing wars since the U.S. Supreme court made DNA non-patentable, a ruling that resulted in an explosion of competition and lower test prices. Since the 2013 ruling, almost all gene testing companies have been unprofitable, spending heavily on R&D to establish reimbursement pathways for highly unpatentable laboratory-developed tests "LDT" to expand their product portfolios and build biobanks that, in return, allow the establishment of scientific research to further push on the reimbursement agenda. For many years, ILMN profited from this growth-focused strategy. However, as the era of free money ends, the gene testing sector is facing renewed pressures to achieve profitability. ILMN alluded to these dynamics during its latest earnings call Some customers experienced supply chain pressures that delayed their lab expansions and others manage inventory and capital more conservatively. Francis deSouza, ILMN CEO, Q2 2022 Earnings Call. I don't disagree over the long-term prospects of ILMN, which form the basis of growth-focused funds such as Softbank and Ark Invest, who have significant positions in the gene testing market, namely NVTA (which, in my view, lags behind its peers in many ways). Still, one should be mindful of the challenges of the industry that impact ILMN's growth prospects, not to mention their direct impact on Grail. Illumina Valuation When valuing a company, it's essential to start with a bottom-up approach by estimating its underlying intrinsic value and then adding on the value of its potential future growth opportunities to come up with a final total. ILMN's share price mirrors investors' aggregate view of the ticker's fair value, incorporating expectations based on various factors, including analyst forecasts, earnings estimates, future growth opportunities, etc... However, this aggregate view of valuation almost always differs from yours or mine. To help put this into context, one could ask themselves if they had $30 billion (ILMN's market cap at the time of this writing) to invest in return of $630 million annually (ILMN's FWD net income,) which translates to 2.1% earnings yield, would they invest in the company or buy a risk-free, 2-year treasury bond currently yielding 4.3%?

Sep 06

Illumina to appeal EU decision to block GRAIL acquisition

Illumina, Inc. (NASDAQ:ILMN) said Tuesday that the company is reviewing the European Commission's (EC) decision prohibiting the acquisition of cancer test developer GRAIL, and it plans to appeal the order. "We are disappointed with the European Commission's decision prohibiting us from acquiring GRAIL back to Illumina," ILMN's General Counsel Charles Dadswell noted. On Monday, Reuters reported that the company was in talks with EU antitrust officials on plans to divest GRAIL ahead of a possible veto on the deal next week. With today's announcement, ILMN said that expecting a divestment order from the EC in the coming months, the company will begin evaluating strategic alternatives for GRAIL if it cannot get a stay order on spinoff pending the appeal.  The EC decision comes after an administrative law judge of the Federal Trade Commission issued a ruling in favor of Illumina (ILMN), handing a setback to U.S. regulator's moves to block the $7.1B deal on antitrust issues.

Shareholder Returns

ILMNUS Life SciencesUS Market
7D0.2%-1.9%-2.5%
1Y-51.7%-31.9%-23.2%

Return vs Industry: ILMN underperformed the US Life Sciences industry which returned -31.4% over the past year.

Return vs Market: ILMN underperformed the US Market which returned -21.5% over the past year.

Price Volatility

Is ILMN's price volatile compared to industry and market?
ILMN volatility
ILMN Average Weekly Movement7.6%
Life Sciences Industry Average Movement9.9%
Market Average Movement6.9%
10% most volatile stocks in US Market15.6%
10% least volatile stocks in US Market2.8%

Stable Share Price: ILMN is not significantly more volatile than the rest of US stocks over the past 3 months, typically moving +/- 8% a week.

Volatility Over Time: ILMN's weekly volatility (8%) has been stable over the past year.

About the Company

FoundedEmployeesCEOWebsite
19989,825Francis deSouzahttps://www.illumina.com

Illumina, Inc. provides sequencing and array-based solutions for genetic and genomic analysis. Its products and services serve customers in a range of markets enabling the adoption of genomic solutions in research and clinical settings for applications in the life sciences, oncology, reproductive health, agriculture, and other emerging segments. The company provides instruments and consumables used in genetic analysis; and genotyping and sequencing services, instrument service contracts, and development and licensing agreements, as well as cancer detection testing services.

Illumina, Inc. Fundamentals Summary

How do Illumina's earnings and revenue compare to its market cap?
ILMN fundamental statistics
Market CapUS$30.01b
Earnings (TTM)-US$20.00m
Revenue (TTM)US$4.69b

6.4x

P/S Ratio

-1,501x

P/E Ratio

Earnings & Revenue

Key profitability statistics from the latest earnings report
ILMN income statement (TTM)
RevenueUS$4.69b
Cost of RevenueUS$1.39b
Gross ProfitUS$3.31b
Other ExpensesUS$3.33b
Earnings-US$20.00m

Last Reported Earnings

Jul 03, 2022

Next Earnings Date

n/a

Earnings per share (EPS)-0.13
Gross Margin70.49%
Net Profit Margin-0.43%
Debt/Equity Ratio16.7%

How did ILMN perform over the long term?

See historical performance and comparison