Illumina (ILMN) AI Stock Analysis

• Market Cap: $11.75B
• Dividend Yield: N/A
• Average Volume (3M): 2.44M
• Price to Earnings (P/E): ―
• Beta (1Y): 1.19
• Revenue Growth: -2.93%
• EPS Growth: -4.69%
• Country: US
• Employees: 8,970
• Sector: Healthcare
• Sector Strength: 76
• Industry: Medical - Diagnostics & Research
• EPS (TTM): -7.72
• Shares Outstanding: 158,400,000
• 10 Day Avg. Volume: 2,157,179
• 30 Day Avg. Volume: 2,439,723
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 3.18
• Price to Cash Flow (P/CF): 9.50
• P/FCF Ratio: 9.50
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $126.88
• Price Target Upside: 71.09% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 19

Illumina's overall stock score reflects significant financial and operational challenges, despite some positive strategic developments and cost-saving measures. The stock's technical indicators and valuation metrics further contribute to a cautious outlook, with the earnings call providing a balanced view of achievements and regional difficulties.

Positive Factors

Cost Management

ILMN announced $100M in incremental cost savings initiatives to help mitigate the China impact, including optimization of stock-based compensation and acceleration of productivity measures globally.

Strategic Appointments

The appointment of Keith Meister to Illumina's board can be seen as positive due to his firm's activist past.

Negative Factors

China Trade Restrictions

The Chinese government moved to ban the import of ILMN sequencers as part of a broader retaliation to increased tariffs.

Executive Departures

The departures of key executives and board changes at Illumina do not signal any real change in the company's direction.

Market Challenges

Illumina faces multiple structural, competitive, and market challenges, and will struggle to regain revenue growth or any long-term earnings power.

Illumina Business Overview & Revenue Model

Company Description

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. Its customers include genomic research centers, academic institutions, government laboratories, and hospitals, as well as pharmaceutical, biotechnology, commercial molecular diagnostic laboratories, and consumer genomics companies. The company markets and distributes its products directly to customers in North America, Europe, Latin America, and the Asia-Pacific region, as well as sells through life-science distributors in various markets within Europe, the Asia-Pacific region, Latin America, the Middle East, and Africa. The company was incorporated in 1998 and is based in San Diego, California.

How the Company Makes Money

Illumina generates revenue through the sale of its sequencing and microarray systems, along with associated consumables and software. A significant portion of its income comes from consumables, which are recurring purchases necessary for operating its equipment. Additionally, the company offers services such as sequencing-as-a-service and genomic analysis, further contributing to its revenue streams. Illumina also engages in strategic partnerships and collaborations with pharmaceutical and biotechnology firms to develop and commercialize new genomic technologies, enhancing its market reach and innovation capabilities. These partnerships often involve co-development agreements, licensing, or research collaborations, providing additional financial growth opportunities.

Illumina Financial Statement Overview

Summary

Illumina faces substantial financial challenges. Despite strong gross margins and manageable leverage, recurring losses and declining equity are significant concerns. Improving cash flow is a positive step, yet the company needs to focus on restoring profitability and growth to enhance its financial health.

Income Statement

The income statement reveals significant challenges. The TTM (Trailing-Twelve-Months) shows a negative net income and EBITDA, indicating profitability issues. Although the gross profit margin is strong at 65.43%, negative EBIT and EBITDA margins highlight operational inefficiencies. Revenue has been relatively stable, but the lack of growth and profitability is concerning.

Balance Sheet

The balance sheet presents a mixed picture. While the debt-to-equity ratio of 0.94 is manageable, the declining stockholders' equity over recent years is troubling. The equity ratio stands at 43.04%, showing moderate financial stability, but the consistent reduction in assets and equity poses a risk.

Cash Flow

Cash flow analysis indicates some positive signs. The operating cash flow to net income ratio is strong at -0.69, suggesting solid cash generation despite net losses. Free cash flow has improved significantly from the previous year, though the company must continue to enhance cash flow management to offset net income losses.

Breakdown
Dec 2024	Dec 2023	Mar 2023	Mar 2022	Mar 2021
Income Statement		Total Revenue
4.37B	4.50B	4.58B	4.53B	3.24B
	Gross Profit
2.86B	2.74B	2.97B	3.15B	2.20B
	EBIT
-833.00M	-1.07B	-4.18B	-123.00M	580.00M
	EBITDA
-725.00M	-608.00M	-3.92B	747.00M	767.00M
	Net Income Common Stockholders
-1.22B	-1.16B	-4.40B	762.00M	656.00M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
1.22B	1.05B	2.04B	1.34B	3.47B
	Total Assets
6.30B	10.11B	12.25B	15.22B	7.58B
	Total Debt
2.54B	2.26B	3.48B	2.47B	1.85B
	Net Debt
1.42B	1.21B	1.47B	1.24B	45.00M
	Total Liabilities
3.93B	4.37B	5.65B	4.48B	2.89B
	Stockholders Equity
2.37B	5.75B	6.60B	10.74B	4.69B
Cash Flow		Free Cash Flow
709.00M	282.00M	-74.00M	337.00M	891.00M
	Operating Cash Flow
837.00M	478.00M	392.00M	545.00M	1.08B
	Investing Cash Flow
-178.00M	-231.00M	-591.00M	-1.07B	-554.00M
	Financing Cash Flow
-570.00M	-1.21B	1.00B	-51.00M	-766.00M

Illumina Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 74.16
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Positive
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ILMN, the sentiment is Negative. The current price of 74.16 is below the 20-day moving average (MA) of 83.17, below the 50-day MA of 97.54, and below the 200-day MA of 123.32, indicating a bearish trend. The MACD of -5.17 indicates Negative momentum. The RSI at 23.91 is Positive, neither overbought nor oversold. The STOCH value of 9.31 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for ILMN.

Illumina Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
IDXX	73 Outperform	$31.91B	36.91	57.66%	―	6.46%	5.82%
TMO	70 Outperform	$165.21B	26.48	13.15%	0.36%	0.05%	6.87%
IQV	70 Outperform	$27.28B	20.64	22.55%	―	2.95%	2.46%
A	68 Neutral	$31.27B	25.20	20.61%	0.93%	-3.00%	3.67%
DHR	65 Neutral	$130.05B	34.37	7.57%	0.62%	-13.50%	-17.25%
ILMN	49 Neutral	$11.75B	―	-30.11%	―	-2.93%	-4.69%
Sector *	48 Neutral	$6.36B	1.09	-49.92%	2.63%	17.17%	0.95%

Illumina Corporate Events

Illumina Updates 2025 EPS Guidance Amid Export Challenges

On March 10, 2025, Illumina announced an updated non-GAAP diluted EPS guidance for fiscal year 2025 and a cost reduction program. The company is addressing export restrictions imposed by China’s Ministry of Commerce, which could impact its revenue from the Greater China business. Despite these challenges, Illumina remains committed to expanding its multiomics portfolio and achieving high-single-digit revenue growth by 2027. The company expects a fiscal 2025 non-GAAP diluted EPS of approximately $4.50 and plans to implement a $100 million cost reduction program to mitigate potential revenue impacts from the Chinese market.