Quality Investor

Illumina, Inc.

Rank #116Capital Return

ILMN · Nasdaq · Healthcare

Illumina, Inc. (ILMN) — Rank #116 by gross profitability (GP/assets 0.43) · ROE 30.0% · Piotroski F-Score N/A.

As-of 2026-09-15 · CIK 0001110803 · all metrics point-in-time as of the filing date.

About

Illumina, Inc. provides sequencing- and array-based solutions for genetic and genomic analysis in the Americas, Europe, Greater China, the Asia Pacific, the Middle East, and Africa.

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The company offers sequencing- and array-based instruments and consumables, which include reagents, flow cells, and library preparation; whole-genome sequencing kits, which sequence entire genomes of various size and complexity; and targeted resequencing kits, which sequence exomes, specific genes, and RNA or other genomic regions of interest. It also provides whole-genome sequencing, genotyping, noninvasive prenatal testing, and product support services. The company serves 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, as well as through life-science distributors. The company has a collaboration with Labcorp Holdings Inc. for the development of oncology treatments through applications of sequencing solutions across the healthcare ecosystem; and strategic collaboration with Integrated DNA Technologies to enable a DRAGEN, secondary analysis pipeline for IDT xGena, FFPE and cfDNA next generation sequencing (NGS) library preparation with custom panels, delivering an integrated, end-to-end solution for somatic oncology research. It also has a data partnership with Center for Data-Driven Discovery in Biomedicine to advance research in pediatric cancer and rare disease. Illumina, Inc.

was incorporated in 1998 and is headquartered in San Diego, California.

Industry
Diagnostics & Research
Sector
Healthcare
State
DE
Filer Category
Large accelerated filer
Fiscal Year End
January 3

Price History

ILMN-54.6% · -14.6% CAGRSPY+80.5% · +12.5% CAGR

Company Snapshot

P/E and reverse DCF are the primary valuation lenses at this stage.

Market Cap

$33.58B

P/E (annual)

40.8

P/S (annual)

7.7

P/B

11.8

P/OCF (annual)

31.1

Shareholder Yield

1.9%

Employees

8,600

Industry

Diagnostics & Research

Exchange

Nasdaq

Signal Flags

3 green1 red
Revenue growth acceleratingGrowth rate increasing year over year
RPO outpacing revenueRemaining performance obligations growing faster than recognized revenue — forward demand building
Sequential beat (rev + EPS)Both revenue and EPS exceeded prior quarter — 1-quarter streak
Revenue declining YoYRevenue contracted year over year

Quality Profile

Profitability

1/1 pass
GP / assets
0.43
Return on equity
30.0%
Gross margin trend
PASS

Safety

1/1 pass
Balance-sheet safety
PASS
Debt / equity
1.34
Current ratio
1.80×
Net cash
$1.17B

Cash Flow

3/3 pass
Positive FCF
PASS
Cash-backed earnings
PASS
Accruals healthy
PASS
SBC / revenue
6.3%

Growth

1/2 pass
Revenue growth
-0.7%
Piotroski F-Score
N/A
Share dilution
-1.9%

Terry Smith quality gate

Passes 2/5 Terry Smith thresholds

1 of 5 threshold not computable from filed data.

What Growth Is Priced In

Implied revenue growth (10Y)

16.2%

fairly valued

The annual FCF growth rate today's price requires over a 10-year horizon (discount rate 10%, terminal growth 2.5%).

Buyback tailwind: -1.9% — per-share value needs a total required return of 14.3% once share-count change is priced in.

vs. own 6-year median revenue growth: -1.2%

Cost-of-equity sensitivity (implied growth at different discount rates)

r = 8%

11.4%

r = 10% (base)

16.2%

r = 12%

20.3%

Net debt / market cap: -3.4%

Base FCF: $931M3Y mean FCF: $641M

Valuation History

Current multiple vs historical range at each filing date. Band spans 25th-75th percentile.

P / E

Price / diluted EPS

21.0xCheap
21.0xmed 57.8x108.0x

P / S

Price / revenue per share

4.1xCheap
3.8xmed 11.1x22.0x

P / B

Price / book value per share

6.6xFair
3.8xmed 8.1x19.1x

P / GP

Price / gross profit per share

6.2xCheap
5.8xmed 16.0x32.3x

P / FCF

Price / free cash flow per share

19.2xCheap
19.2xmed 76.2x305.2x

FCF yield, shareholder yield, and buyback activity are the primary reads at this stage.

Profitability

Gross profitability (GP / assets)

0.43

Primary signal (Novy-Marx).

75th pctl of 37 SIC 38 peers

Return on equity

30.0%

Gross margin

66.1%

75th pctl of 37 SIC 38 peers

Revenue growth (YoY)

-0.7%

RPO growth (YoY)

12.3%

Remaining performance obligations growth — RPO > revenue = forward demand building.

Gross margin improving

Margin trend vs prior year.

PASS

Operating Leverage

2023202320242025
Revenue vs COGS
Revenue vs OpEx
Op. Income vs Revenue

Growth

Revenue CAGR (3Y)

-1.8%

Revenue CAGR (5Y)

6.0%

Earnings CAGR (3Y)

FCF CAGR (3Y)

106.3%

Anti-fragile safety

Balance-sheet safety

Composite anti-fragile check.

PASS

Debt / equity

1.34

24th pctl of 35 SIC 38 peers (best = lowest)

Current ratio

1.80×

20th pctl of 36 SIC 38 peers

Quick ratio

1.22×

Net cash

$1.17B

Cash & equivalents minus total debt.

Cash-flow health

Free cash flow

$931.00M

Operating cash flow minus capex.

Positive free cash flow

PASS

FCF / net income

0.10

Cash-backing of earnings.

FCF/NI divergence

Unfavorable divergence (yellow flag).

PASS

Accruals healthy

Cash-backed earnings.

PASS

SBC / revenue

6.3%

Stock-based comp intensity.

Piotroski F-Score

F-Score

N/A

Only 8/9 components determinable.

Lifecycle Phase History

20212025
Decline
Hypergrowth
Startup
Capital Return