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Is It Time To Buy Illumina Inc (ILMN)?

Today we're going to take a look at the well-established Illumina Inc (NASDAQ:ILMN). The company's stock saw a double-digit share price rise of over 10% in the past couple of months on the NasdaqGS. As a large-cap stock with high coverage by analysts, you could assume any recent changes in the company’s outlook is already priced into the stock. But what if there is still an opportunity to buy? Let’s examine ILMN’s valuation and outlook in more detail to determine if there’s still a bargain opportunity. See our latest analysis for ILMN

What is ILMN worth?

According to my valuation model, the stock is currently overvalued by about 98%, trading at $201.41 compared to my intrinsic value of $101.79. This means that the buying opportunity has probably disappeared for now. Another thing to keep in mind is that ILMN’s share price is quite stable relative to the rest of the market, as indicated by its low beta. This means that if you believe the current share price should move towards its intrinsic value over time, a low beta could suggest it is not likely to reach that level anytime soon, and once it’s there, it may be hard to fall back down into an attractive buying range again.

Can we expect growth from ILMN?

NasdaqGS:ILMN Future Profit Sep 24th 17
NasdaqGS:ILMN Future Profit Sep 24th 17

Future outlook is an important aspect when you’re looking at buying a stock, especially if you are an investor looking for growth in your portfolio.Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at ILMN future expectations. Though in the case of ILMN, it is expected to deliver a negative earnings growth of -5.28%, which doesn’t help build up its investment thesis. It appears that risk of future uncertainty is high, at least in the near term.

What this means for you:

Are you a shareholder? If you believe ILMN is currently trading above its value, selling high and buying it back up again when its price falls towards its real value can be profitable. Given the risk from a negative growth outlook, this could be the right time to de-risk your portfolio. But before you make this decision, take a look at whether its fundamentals have changed.

Are you a potential investor? If you’ve been keeping tabs on ILMN for some time, now may not be the best time to enter into the stock. Price climbed passed its true value, in addition to a risky future outlook. However, there are also other important factors which we haven’t considered today, such as the track record of its management. Should the price fall in the future, will you be well-informed enough to buy?

Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on Illumina. You can find everything you need to know about ILMN in the latest infographic research report. If you are no longer interested in Illumina, you can use our free platform to see my list of over 50 other stocks with a high growth potential.


To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.

The author is an independent contributor and at the time of publication had no position in the stocks mentioned.

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