Illumina remains the dominant player in genomic sequencing but is transitioning into a mature compounder phase. Having resolved recent antitrust distractions and returned to profitability in 2025, the company faces normalized mid-single-digit growth, requiring disciplined capital allocation and margin protection against emerging competitors. Fair value range: low $74.5, high $122, with mid-point at $98.4.
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§1 Samenvatting
Current price ($145.70) embeds an unrealistic 10.77% implied growth rate versus grounded 4.85% projections.
Valuation models anchor on mid-single-digit mature compounding, yielding a $98.39 fair value midpoint.
Severe overvaluation relative to peers (PEG 4.93 vs 1.58 median) restricts any multiple expansion.
Primary models (Multi-stage Moat Fade and Discounted Earnings) highlight moat fade and capped pricing power.
Rating is Sell due to the massive 32% downside risk against conservative 4-5% revenue growth estimates.
Fair value
$98
Margin of safety
-48.1%
Confidence
74/100
Moat
6/10
Educational research only - not investment advice, an offer, or a trade instruction. Confirm current data and do your own due diligence before acting.
$145.70Price
Low $74.53
Mid $98.39
High $122.41
Illumina remains the dominant player in genomic sequencing but is transitioning into a mature compounder phase. Having resolved recent antitrust distractions and returned to profitability in 2025, the company faces normalized mid-single-digit growth, requiring disciplined capital allocation and margin protection against emerging competitors.
Dominant installed base in short-read
Dominant installed base in short-read sequencing.
High switching costs for integrated
High switching costs for integrated clinical diagnostics workflows.
Cycle upside
Accelerating elasticity of demand in sequencing and successful expansion into high-margin clinical diagnostics.
ILMN (ILMN)'s margin set covers gross margin, operating margin, net margin, and free-cash-flow margin. The five-year trajectory is plotted so the reader can separate cyclical noise from secular trend.
Margin expansion or compression is read against the revenue base: if operating margin expands while revenue grows, that is operating leverage. If gross margin compresses, the cause (mix shift, input costs, pricing) is annotated in the numbers analysis.
Peer-relative margin context lives on the parent peers tab, which sets ILMN's gross, operating, and net margins against four to five named peers from the same archetype and sector.
FCF margin is reported alongside operating margin so the reader can spot cases where capex intensity changes the cash-conversion read even when reported profitability is steady.
FAQ
ILMN — frequently asked questions
Based on our latest analysis, ILMN looks meaningfully overvalued. The current price is $146 versus a composite fair-value midpoint of $98.4 (range $74.5–$122), which implies roughly 32.5% downside to the midpoint.
Our composite fair-value range for ILMN is $74.5–$122, with a midpoint of $98.4. The range is triangulated across multiple valuation models (discounted earnings, forward earnings scenarios, peer multiples, and where applicable owner earnings or reverse DCF) and weighted by reliability for ILMN's archetype.
Our current rating for ILMN is Sell with a confidence score of 74/100. Sell. Transition to a mature compounder warrants a severe multiple contraction. Our $98.39 fair value dictates avoiding the stock until the market prices in normalized growth realities. This is research for educational purposes, not personalized investment advice.
The top risks our latest report flags for ILMN are: Severe Moat Fade & Pricing War; Elasticity Failure on NovaSeq X; Capital Allocation Missteps. The single biggest risk is Severe Moat Fade & Pricing War: Emerging competitors force steep price cuts, compressing operating margins below 15% and permanently stalling revenue growth.
Our current rating for ILMN is Sell, issued with a confidence score of 74/100 and a moat score of 6/10. The rating reflects the composite fair-value range ($74.5–$122) versus the current price of $146.
ILMN is classified as a mature compounder stock. Archetype determines how every downstream parameter — discount rate, terminal growth, deceleration curve, terminal multiple, scenario probability weights, scorecard weights, and which valuation models are prioritized — is calibrated for ILMN.
