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1. Company Snapshot

1.a. 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.

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1.b. Last Insights on ILMN

Illumina's recent performance was negatively impacted by margin concerns despite beating Q4 EPS and revenue estimates. Institutional investors, such as WCM Investment Management LLC and QRG Capital Management Inc., reduced their holdings in the company. Additionally, the company's Q4 earnings report revealed a 10% stock dip despite a 42% profit jump. Key metrics, including margin performance, raised concerns among investors. Illumina's growth outlook for 2026 may be impacted by these margin concerns. (Source: Bloomberg)

1.c. Company Highlights

2. Illumina's Q4 Results Exceed Expectations with Strong Clinical Consumables Growth

Illumina reported Q4 revenue growth of 7% ex-China, with clinical consumables revenue growing 20% ex-China, driven by adoption of sequencing-based diagnostic tests and broader demand for comprehensive genomic profiling and whole genome approaches in oncology and genetic diseases. The company's non-GAAP EPS came in at $1.35, beating estimates of $1.26. Non-GAAP operating margins expanded by 180 basis points, and free cash flow for the year was $267 million for Q4. For the full year 2025, revenue growth was 2% ex-China, and non-GAAP EPS grew by 16% year over year.

Publication Date: Feb -16

📋 Highlights
  • Clinical Consumables Growth:: 20% ex-China growth in Q4, driven by sequencing diagnostics and genomic profiling demand in oncology/genetic diseases.
  • 2025 Revenue Performance:: Ex-China revenue grew 2% YoY (7% in Q4), with total 2025 EPS up 16% to $4.84, exceeding guidance.
  • Margin Expansion:: Non-GAAP operating margins expanded 180 bps, and non-GAAP EPS grew 16% YoY, reflecting operational efficiency.
  • Free Cash Flow & Shareholder Returns:: Generated $1.1 billion in annual free cash flow (Q4: $267M) and returned $740M via share repurchases.
  • Strategic Pillars Execution:: Core sequencing (NovaSeq X), multiomics (Somalogic acquisition), and data/software (BioInsight) drove 2025 momentum for 2026 growth.

Segment Performance

The clinical segment remains the primary growth driver, with higher testing volumes and more sequencing-intensive applications reinforcing demand for high throughput, high-quality sequencing on the NovaSeq X. Research conditions continue to be measured, though the company is seeing signs of stabilization. Total sequencing GB output on connected high and mid-throughput instruments grew at a rate of more than 30% year over year, driven by robust strength in clinical.

Guidance and Outlook

The company expects organic revenue growth of 2% to 4% in 2026, excluding China, with overall demand similar to what was seen in 2025. Clinical consumables are expected to continue growing robustly, with double-digit to mid-teens growth expected in 2026. The company's outlook assumes that research will decline mid to high single digits. As Jacob Thaysen stated, "the intensity of larger panels is expected to be the main growth driver going forward."

Valuation

With a P/E Ratio of 21.03 and an EV/EBITDA of 13.32, the market is pricing in a certain level of growth for Illumina. The company's ROE of 33.7% and ROIC of 12.18% indicate a strong ability to generate returns on equity and invested capital. Analysts estimate next year's revenue growth at 5.5%, which is slightly higher than the company's guidance. Given the current valuation multiples, it remains to be seen if the company's growth prospects are fully priced in.

Cash Flow and Balance Sheet

The company generated $321 million in cash flow from operations for the quarter, and $1.1 billion for the year. Capital expenditures were $54 million, and free cash flow for the year was $267 million for Q4. The company ended the quarter with approximately $1.63 billion in cash, cash equivalents, and short-term investments, and gross leverage of approximately 1.6 times gross debt to last twelve months EBITDA.

3. NewsRoom

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Illumina unveils roadmap of groundbreaking NovaSeq X advancements in data quality, output, speed, and flexibility

14:15

Source: prnewswire.com

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Short Interest in Illumina, Inc. (NASDAQ:ILMN) Expands By 28.6%

Feb -18

Source: defenseworld.net

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Eagle Health Investments LP Sells 21,100 Shares of Illumina, Inc. $ILMN

Feb -18

Source: defenseworld.net

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Illumina To Webcast Upcoming Investor Conference

Feb -17

Source: prnewswire.com

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Caprock Group LLC Makes New $1.48 Million Investment in Illumina, Inc. $ILMN

Feb -15

Source: defenseworld.net

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Illumina Q4 Earnings & Revenues Top Estimates, Stock Dips

Feb -12

Source: zacks.com

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Illumina, Inc. (ILMN) Q4 2025 Earnings Call Transcript

Feb -06

Source: seekingalpha.com

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Illumina (ILMN) Q4 Earnings: Taking a Look at Key Metrics Versus Estimates

Feb -06

Source: zacks.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (6.47%)

6. Segments

Core Illumina

Expected Growth: 6.5%

Illumina's Core Illumina segment growth of 6.5% is driven by increasing adoption of Next-Generation Sequencing (NGS) in research and clinical markets, growing demand for genetic testing, and expanding use of NGS in emerging markets. Additionally, the company's innovative product portfolio, including the NovaSeq and iSeq platforms, is contributing to growth.

Grail

Expected Growth: 7.0%

Illumina's Grail segment growth is driven by increasing adoption of liquid biopsy tests for early cancer detection, expansion into new markets, and growing demand for non-invasive genetic testing. Additionally, strategic partnerships, investments in R&D, and regulatory approvals are fueling growth, with a 7.0% growth rate.

Eliminations

Expected Growth: 0.0%

Illumina, Inc.'s eliminations growth rate of 0.0% is driven by stagnant sales, lack of innovation, and intense competition in the genomics industry. The company's failure to diversify its product portfolio and expand into new markets has resulted in flat growth. Additionally, increasing research and development expenses have not yielded significant returns, further contributing to the stagnant growth.

7. Detailed Products

NextSeq 1000/2000

High-throughput sequencing systems for a wide range of applications, from genomics and transcriptomics to epigenomics and gene regulation.

NovaSeq 6000

High-throughput sequencing system for large-scale genomics and transcriptomics applications.

iSeq 100

Benchtop sequencing system for small-scale genomics and transcriptomics applications.

MiSeq

Benchtop sequencing system for small-scale genomics and transcriptomics applications.

VeriSeq NIPT Solution

Non-invasive prenatal testing (NIPT) solution for detecting chromosomal abnormalities during pregnancy.

TruSight Oncology

Comprehensive genomic profiling assay for cancer research and clinical applications.

TruSight Tumor 170

Comprehensive genomic profiling assay for cancer research and clinical applications.

AmpliSeq for Illumina

Targeted sequencing assay for detecting genetic variants associated with disease.

DesignStudio

Software tool for designing targeted sequencing assays.

8. Illumina, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Illumina's products are highly specialized and there are limited substitutes available in the market, reducing the threat of substitutes.

Bargaining Power Of Customers

Illumina's customers have some bargaining power due to the availability of alternative sequencing technologies, but the company's strong brand reputation and high-quality products mitigate this power.

Bargaining Power Of Suppliers

Illumina has a diverse supplier base and is not heavily dependent on any single supplier, reducing the bargaining power of suppliers.

Threat Of New Entrants

The high barriers to entry in the genomics industry, including significant capital expenditures and regulatory hurdles, reduce the threat of new entrants.

Intensity Of Rivalry

The genomics industry is moderately competitive, with a few established players, but Illumina's strong market position and innovative products help to mitigate the intensity of rivalry.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 21.52%
Debt Cost 3.95%
Equity Weight 78.48%
Equity Cost 9.97%
WACC 8.67%
Leverage 27.42%

11. Quality Control: Illumina, Inc. passed 5 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Guardant Health

A-Score: 5.2/10

Value: 8.0

Growth: 4.7

Quality: 6.4

Yield: 0.0

Momentum: 10.0

Volatility: 2.3

1-Year Total Return ->

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Stock-Card
Exact Sciences

A-Score: 4.4/10

Value: 4.4

Growth: 6.0

Quality: 3.5

Yield: 0.0

Momentum: 9.0

Volatility: 3.3

1-Year Total Return ->

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Stock-Card
Sotera Health

A-Score: 3.9/10

Value: 1.1

Growth: 5.2

Quality: 4.6

Yield: 0.0

Momentum: 8.0

Volatility: 4.7

1-Year Total Return ->

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Stock-Card
Revvity

A-Score: 3.5/10

Value: 2.9

Growth: 3.1

Quality: 5.6

Yield: 0.0

Momentum: 3.0

Volatility: 6.3

1-Year Total Return ->

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Stock-Card
Illumina

A-Score: 3.4/10

Value: 2.6

Growth: 2.8

Quality: 7.2

Yield: 0.0

Momentum: 4.0

Volatility: 3.7

1-Year Total Return ->

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Stock-Card
Neogen

A-Score: 2.9/10

Value: 9.0

Growth: 1.3

Quality: 3.2

Yield: 0.0

Momentum: 1.0

Volatility: 2.7

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

119.03$

Current Price

119.03$

Potential

-0.00%

Expected Cash-Flows