Illumina, Inc. - NASDAQ:ILMN - Comprehensive analysis
Following a significant reduction in our fair value estimate after the recent analyst day, prompted by weaker-than-expected targets from Illumina's management team, we no longer see sufficient upside in the shares to justify their inclusion on the Best Ideas list. Our revised fair value estimate reflects diminished sales growth prospects—projected at 7% annually over the next decade, down from the previously anticipated 9%—due to a slightly lower outlook for the entire industry and a more gradual acceleration expected after 2024, influenced by ongoing macroeconomic challenges and issues in China. Additionally, Illumina's management plans to increase operating margins by approximately 500 basis points by 2027, which is less ambitious than we had previously anticipated, as their approach to reducing the research and development budget appears to be more conservative than we hoped. Consequently, we now forecast mid-teens adjusted EPS growth compounded annually from 2024 to 2033, a decrease from our earlier expectation of over 20%.
Free evaluation through quantitative algorithms Illumina, Inc. - NASDAQ:ILMN
Growth-Scoring Model Detail
Total Revenue Growth Over Prior Year | -2.93 | Market 12 Sector 20 |
Gross Profit Growth Over Prior Year | 1.63 | Market 32 Sector 50 |
EBITDA Growth Over Prior Year | 108 | Market 98 Sector 93 |
EBITA Growth Over Prior Year | 364 | Market 99 Sector 100 |
EBIT Growth Over Prior Year | 0 | Market 0 Sector 0 |
Earnings from Cont. Ops. Growth Over Prior Year | 0 | Market 0 Sector 0 |
Net Income Growth Over Prior Year | 0 | Market 0 Sector 0 |
Normalized Net Income Growth Over Prior Year | 0 | Market 0 Sector 0 |
Diluted EPS before Extra Growth Over Prior Year | 0 | Market 0 Sector 0 |
A/R Growth Over Prior Year | -0.13 | Market 29 Sector 43 |
Inventory Growth Over Prior Year | -6.81 | Market 15 Sector 29 |
PPE Net Growth Over Prior Year | -20.44 | Market 5 Sector 15 |
Total Assets Growth Over Prior Year | -37.66 | Market 2 Sector 15 |
Tangible Book Value Growth Over Prior Year | 21.1 | Market 72 Sector 60 |
Common Equity Growth Over Prior Year | -58.69 | Market 0 Sector 6 |
Cash from Ops. Growth Over Prior Year | 76 | Market 95 Sector 86 |
CAPEX Growth Over Prior Year | -34.36 | Market 12 Sector 24 |
Dividend per Share Growth Over Prior Year | 0 | Market 42 Sector 53 |
Levered Free Cash Flow Growth Over Prior Year | -48.38 | Market 10 Sector 17 |
Unlevered Free Cash Flow Growth Over Prior Year | -41.69 | Market 10 Sector 22 |
Profitability-Scoring Model Detail
Gross Margin % | 69 | Market 90 Sector 80 |
SG&A Margin % | 33.1 | Market 90 Sector 43 |
EBITDA Margin % | 16.03 | Market 36 Sector 64 |
EBITA Margin % | 10.91 | Market 27 Sector 64 |
EBIT Margin % | 7.94 | Market 24 Sector 64 |
Earnings from Cont. Ops Margin % | -27.97 | Market 2 Sector 37 |
Net Income Margin % | -27.97 | Market 2 Sector 37 |
Net Income Avail. for Common Margin % | -27.97 | Market 2 Sector 37 |
Normalized Net Income Margin % | 4.26 | Market 21 Sector 70 |
Levered Free Cash Flow Margin % | 6.07 | Market 36 Sector 56 |
Unlevered Free Cash Flow Margin % | 7.5 | Market 41 Sector 60 |
Return on Assets % | 2.64 | Market 11 Sector 67 |
Return on Capital % | 3.34 | Market 12 Sector 70 |
Return on Equity % | -30.13 | Market 2 Sector 37 |
Return on Common Equity % | -30.13 | Market 2 Sector 43 |
Total Asset Turnover | 0.53 | Market 32 Sector 62 |
