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what it is
Illumina sells the DNA-reading machines and test kits that labs use to study disease, cancer, and human genetics.
how it gets paid
Last year Illumina made $4.3B in revenue. Sequencing consumables was the main engine at $2.55B, or 59% of sales.
why growth slowed
Revenue fell 0.7% last year. The advance was probably driven by ongoing good demand for high-throughput consumables as customers continue to transition to novaseq x.
what just happened
Illumina posted a clean quarter, with EPS of $2.17 versus the $1.28 estimate.
At a glance
B++ balance sheet — above average — nothing keeping you up at night
40/100 earnings predictability — expect surprises
32.0x trailing p/e — you're paying up for this one
20.5% return on capital — every dollar works hard here
xvary composite: 72/100 — average
What they do
Illumina sells the DNA-reading machines and test kits that labs use to study disease, cancer, and human genetics.
Illumina still turns a $4.3B revenue base into a 26.5% operating margin and a 20.5% return on capital. Sequencing workflow lock-in (labs build protocols around one platform) means your customer is not just buying a box, they are buying years of validated processes, staff training, and recurring reagent orders. That is why a company with only average recent sales growth of 4.0% still earns an 18.5% net margin.
How they make money
$4.3B
annual revenue · their business grew -0.7% last year
Sequencing consumables
$2.55B
+5.0%
Sequencing instruments
$0.86B
3.0%
Services and support
$0.52B
+2.0%
Array-based solutions
$0.26B
1.0%
Other revenue
$0.11B
0.0%
The products that matter
reads DNA and sells the supplies
Sequencing Systems & Consumables
$4.3B revenue
it's the entire $4.3B business, but last year's top line still slipped 0.7%. the bet is not on breadth. it's on NovaSeq X placements turning into higher-margin consumables demand.
entire business
Key numbers
32.0x
trailing p/e
You are paying a premium multiple for a company with revenue down 0.7% vs. prior year. That mismatch is the whole debate.
26.5%
operating margin
Operating margin → profit after running the business → so what: Illumina still has real pricing power.
20.5%
return on capital
Return on capital → profit earned on money put to work → so what: this is still a quality business, even with messy growth.
$994M
long-term debt
Debt is only 4% of capital, so the balance sheet is not the problem here. Demand and valuation are.
Financial health
B++
strength
- balance sheet grade B++ — above average financial health
- risk rank 3 — safer than 50% of stocks
- price stability 25 / 100
- long-term debt $994M (4% of capital)
- net profit margin 18.5% — keeps 18 cents of every dollar in revenue
- return on equity 27% — $0.27 profit for every $1 investors have put in
B++ — functional but not a standout on the balance sheet.
Total return vs. market
You invested $10,000 in ILMN 3 years ago → it's now worth $7,400.
The index would have given you $14,770.
source: institutional data · total return
What just happened
beat estimates
Illumina posted a clean quarter, with EPS of $2.17 versus the $1.28 estimate.
Latest-quarter revenue was $3.2B, up 194% vs. prior year, and gross margin was 66.3%. The bigger picture is less dramatic: trailing annual revenue is still $4.3B, down 0.7% vs. prior year.
$1.1B
revenue
$2.17
eps
66.3%
gross margin
the number that mattered
The 69.53% EPS surprise mattered because it showed cost control is working even before sales fully recover.
-
illumina likely closed out 2025 with good results.
-
in mid-january, the company announced preliminary numbers for the december quarter.
-
it stated that sales were roughly $1.155 billion, which would represent a 5% increase from the prior-year period.
-
excluding china, where the company is restricted from selling certain instruments, the top line was even stronger, rising at a 7% clip.the advance was probably driven by ongoing good demand for high-throughput consumables as customers continue to transition to novaseq x. while many labs have been vigilant with their spending, management noted that it was seeing some stabilization from research clients.
-
illumina expects share earnings in the december quarter to be between $1.27 and $1.30, which would represent vs. prior year growth of 48%–51%.
source: company earnings report, 2026
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What could go wrong
the top threat is china restrictions on sequencing instrument sales.
med
china restrictions on sequencing instrument sales
China is already carved out of parts of the instrument story. That matters because fewer placements today mean fewer consumables orders tomorrow.
this risk does not just pressure one quarter. It can slow the installed-base flywheel behind Illumina's $4.3B revenue base.
med
NovaSeq X transition stalling
The stock is leaning hard on 890 NovaSeq X systems already placed and stronger consumables pull-through. If placements or utilization soften, the rerating story loses its engine.
60%+ of Q4 placements went to clinical customers. If that mix stops improving, the case for stickier recurring revenue gets thinner fast.
med
governance and sentiment overhang
Derivative litigation and lingering GRAIL-era baggage still hang over the name. That does not change the science, but it can cap how much valuation expansion investors are willing to pay for.
with the stock already above the street's $130 midpoint target, sentiment matters more than it would at a cheaper entry price.
China restrictions and NovaSeq X execution are the two risks that matter most because both feed directly into future consumables demand, which is the part of the story investors actually want to own.
source: institutional data · regulatory filings · risk analysis
Pay attention to
calendar
next earnings report
the next update is expected around may 2026. you want to see whether Q4's preliminary momentum carried into the new year.
metric
NovaSeq X installed base
890 systems is the number to anchor on. More boxes today usually means more consumables revenue later.
trend
clinical consumables growth outside China
20% growth outside China is the strongest proof that the recurring side of the model is still working.
risk
street expectations vs. stock price
the shares trade at $153 while the street midpoint sits at $130. If estimates do not keep moving up, valuation becomes a headwind.
Analyst rankings
short-term outlook
top 5%
momentum score 1 — the highest rating. in human-speak, analysts think the stock can keep outperforming in the near term.
risk profile
average
stability score 3 — middle of the pack. not a bunker stock, not chaos either.
chart momentum
average
technical score 3 — the tape is constructive, but not screaming anything special.
earnings predictability
40 / 100
earnings are harder to model here than at steadier medtech names. you should expect a few surprises.
source: institutional data
Institutional activity
institutions have been net buying for 2 consecutive quarters — 371 buyers vs. 340 sellers in 3q2025. total institutional holdings: 0.2B shares. net buying for 2 quarters.
source: institutional data
Price targets
3-5 year target range
$60
$199
$153
current price
$130
target midpoint · 15% from current · 3-5yr high: $220 (+45% · 10% ann'l return)
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