Illumina, Inc. (NASDAQ: ILMN)

Sector: Healthcare Industry: Diagnostics & Research CIK: 0001110803
Market Cap 18.83 Bn
P/B 7.91
P/E 26.78
P/S 4.39
ROIC (Qtr) 11.02
Div Yield % 0.00
Rev 1y % (Qtr) 0.37
Total Debt (Qtr) 2.50 Bn
Debt/Equity (Qtr) 1.05

About

Price action

Investment thesis

Bull case

  • Strong operating cash flow of 1.12B provides robust 0.45x coverage of total debt 2.50B, indicating excellent debt servicing capability and financial flexibility.
  • Operating cash flow of 1.12B provides exceptional 11.22x coverage of interest expenses 100M, showing strong debt service capability.
  • Robust free cash flow of 1B exceeds capital expenditure of 122M by 8.20x, indicating strong organic growth funding capability.
  • Robust tangible asset base of 4.84B provides 5.80x coverage of working capital 834M, indicating strong operational backing.
  • Operating cash flow of 1.12B fully covers other non-current liabilities 334M by 3.36x, showing strong long-term stability.

Bear case

  • Operating cash flow of 1.12B barely covers its investment activities of (211M), with a coverage ratio of -5.32, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Investment activities of (211M) provide weak support for R&D spending of 984M, which is -0.21x, suggesting potentially insufficient investment in innovation relative to other capital deployment.
  • Cash reserves of 1.05B provide limited coverage of acquisition spending of (7M), which is -150x, suggesting aggressive expansion might strain liquidity if market conditions deteriorate.
  • The company's operating cash flow of 1.12B shows concerning coverage of stock compensation expenses of 291M, with a 3.86 ratio indicating potential earnings quality issues.
  • Operating cash flow of 1.12B is outpaced by equity issuance of (673M) (-1.67 ratio), indicating concerning reliance on equity markets for funding operations.

Segments Breakdown of Revenue (2024)

Segments Breakdown of Revenue (2024)

Peer comparison

Companies in the Diagnostics & Research
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 TMO Thermo Fisher Scientific Inc. 217.82 Bn 68.63 8.84 35.68 Bn
2 DHR Danaher Corp /De/ 152.30 Bn 63.15 9.19 16.86 Bn
3 IDXX Idexx Laboratories Inc /De 52.07 Bn 50.68 12.49 1.09 Bn
4 A Agilent Technologies, Inc. 43.58 Bn 58.11 13.53 3.35 Bn
5 IQV Iqvia Holdings Inc. 32.77 Bn 25.54 2.06 15.19 Bn
6 DGX Quest Diagnostics Inc 30.26 Bn 44.25 4.05 6.38 Bn
7 LH Labcorp Holdings Inc. 28.36 Bn 23.29 2.64 6.53 Bn
8 MTD Mettler Toledo International Inc/ 28.31 Bn 32.57 7.03 2.15 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 3.30 2.61
EV to Cash from Ops. EV/CFO 18.19 17.76
EV to Debt EV to Debt 8.17 46.77
EV to EBIT EV/EBIT 20.52 15.40
EV to EBITDA EV/EBITDA 19.35 5.16
EV to Free Cash Flow [EV/FCF] EV/FCF 20.41 15.58
EV to Market Cap EV to Market Cap 1.08 1.76
EV to Revenue EV/Rev 4.76 5.14
Price to Book Value [P/B] P/B 7.91 -21.17
Price to Earnings [P/E] P/E 26.78 12.08
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) 0.00 -1.84
Dividend Payout Ratio % Div Payout % (Qtr) 0.00 2.86
Dividend per Basic Share Div per Share (Qtr) 0.00 0.19
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 0.00 1.94
Interest Coverage Int. cover (Qtr) 9.95 -139.68
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) 18.67 -36.38
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 20.83 23.63
Dividend Growth (1y) % Dividend Growth (1y) % 0.00 0.25
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 152.49 10.94
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 235.43 -444.99
EBIT Growth (1y) % EBIT 1y % (Qtr) 169.10 7.67
EBT Growth (1y) % EBT 1y % (Qtr) 158.42 -7.01
EPS Growth (1y) % EPS 1y % (Qtr) 144.92 16.69
FCF Growth (1y) % FCF 1y % (Qtr) 82.82 55.89
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 1.14 185.51
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.69 0.58
Cash Payout Ratio Cash Payout (Qtr) 0.00 0.01
Cash Ratio Cash Ratio (Qtr) 0.54 1.24
Current Ratio Curr Ratio (Qtr) 1.43 2.73
Debt to Equity Ratio Debt/Equity (Qtr) 1.05 -2.52
Interest Cover Ratio Int Coverage (Qtr) 9.95 -139.68
Times Interest Earned Times Interest Earned (Qtr) 9.95 -139.68
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 29.60 -97.23
EBIT Margin % EBIT Margin % (Qtr) 23.20 -115.64
EBT Margin % EBT Margin % (Qtr) 20.87 -114.24
Gross Margin % Gross Margin % (Qtr) 66.20 44.75
Net Profit Margin % Net Margin % (Qtr) 16.40 -113.07