Illumina, Inc. (ILMN) Stock Valuation — DCF Analysis
Medical - Diagnostics & Research · NASDAQ
Current Price
$160.97
Intrinsic Value
$226.38
+28.9% margin of safety
COMPETITIVE MOAT
↑NovaSeq X Adoption Fuels Growth
Accelerated adoption of the NovaSeq X platform is driving significant revenue growth. This advanced sequencing technology is becoming a standard for high-throughput genomic analysis.
↑Integrated Software Ecosystem
Illumina's software ecosystem, enhanced by partnerships like IDT, streamlines research workflows. This integration creates stickiness for customers by simplifying complex genomic analysis.
↑Market Leadership in Sequencing
Illumina maintains a dominant position in the sequencing market. Their established infrastructure and brand recognition are difficult for competitors to overcome.
INVESTMENT RISKS
↓Grail Divestiture Uncertainty
The ongoing situation with Grail introduces regulatory and financial uncertainty. Potential divestiture could impact future strategic direction and cash flow.
↓Intensifying Competition
While strong, Illumina faces increasing competition in the genomics space. Emerging technologies and new entrants could challenge their market share.
↓Dependence on Capital Expenditures
The high cost of sequencing instruments and consumables creates a barrier to entry but also means customers have significant capital tied up. This can slow adoption during economic downturns.
Base case
ILMN base case valuation
A base case discounted cash flow model for ILMN estimates an intrinsic value of about $226.38 per share, against a current price of $160.97. The model assumes 13.4% annual free cash flow growth, a 10.0% discount rate, and a 25x exit multiple.
Intrinsic Value
$226.38
Margin of safety
+28.9%
Expected annual return
+7.1%
Base case assumptions: 13.4% annual growth, 10.0% discount rate, 25x exit multiple, 5 year projection. Data as of 2026-06-12.
This base case uses default assumptions and is not financial advice. The intrinsic value changes significantly when the growth rate or discount rate changes. Open the calculator to set your own assumptions and see the full sensitivity range.
Customize the ILMN valuation
Adjust the growth rate, discount rate, and exit multiple to see how the intrinsic value and margin of safety for Illumina, Inc. respond.
Open DCF Calculator for ILMNCompany Overview
Illumina, Inc. specializes in delivering advanced genetic and genomic analysis tools, primarily through sequencing and array technologies. The company's offerings empower clients across various sectors to integrate genomic insights into both research and clinical environments, with applications spanning critical fields like life sciences, cancer diagnostics, reproductive health, agriculture, and innovative new domains. Illumina's portfolio encompasses specialized instrumentation and necessary consumables for genetic analysis, alongside comprehensive genotyping and sequencing services. They also offer instrument maintenance agreements, collaborate through development and licensing deals, and perform cancer detection tests. Its diverse clientele comprises leading genomic research facilities, universities, state-funded laboratories, medical centers, pharmaceutical and biotechnology firms, commercial molecular diagnostic providers, and businesses focused on consumer genomics. Illumina employs a two-pronged distribution strategy, selling directly to clients across North America, Europe, Latin America, and the Asia-Pacific. Additionally, it partners with life-science distributors to reach markets in Europe, the Asia-Pacific, Latin America, the Middle East, and Africa. Established in 1998, the company maintains its corporate headquarters in San Diego, California.
Financial Metrics — ILMN Stock Valuation Data
Revenue/Share (TTM)
$28.70
FCF/Share (TTM)
$6.46
ROIC (TTM)
13.8%
ROE (TTM)
34.0%
P/FCF
24.6x
EV/EBITDA
18.3x
FCF Yield
4.06%
Debt/Equity
0.92x
Based on trailing twelve-month data, ILMN shows a free cash flow per share of $6.46 and a ROIC of 13.8%, key inputs for stock valuation using the DCF method. The P/FCF ratio of 24.6x and FCF yield of 4.06% are important context metrics when evaluating ILMN's stock valuation relative to peers.
Frequently Asked Questions
What is the intrinsic value of ILMN?
Illumina, Inc. currently generates $6.46 in free cash flow per share. At the current price of $160.97, a DCF model would discount these cash flows at an appropriate WACC and apply a terminal growth rate to arrive at an intrinsic value. The result depends heavily on your growth and discount rate assumptions — a 1% change in WACC typically shifts the fair value estimate by 10-15%. In MiniValuator the model uses a single discount rate that you can edit directly, 10% by default, rather than a computed WACC.
Is ILMN undervalued?
ILMN trades at a P/FCF ratio of 24.6x with a free cash flow yield of 4.06%. This P/FCF is in a moderate range. However, whether ILMN is truly undervalued requires comparing the DCF intrinsic value to the current market price and evaluating whether the margin of safety is sufficient for your risk tolerance.
How do I value ILMN stock using DCF?
To perform a DCF valuation on Illumina, Inc.: (1) Start with the trailing free cash flow per share ($6.46) as the base, (2) project future FCF growth over 5-10 years based on Medical - Diagnostics & Research industry trends and company fundamentals, (3) apply a discount rate (WACC) reflecting ILMN's risk profile — with a debt-to-equity of 0.92x, capital structure is an important factor, and (4) add a terminal value for cash flows beyond the projection period.
What is DCF valuation and how does it apply to ILMN?
DCF (Discounted Cash Flow) estimates what a company is worth today based on its future cash generation. For Illumina, Inc., this means projecting how much free cash flow the company will produce over the next 5-10 years, shaped by Medical - Diagnostics & Research trends, then discounting those amounts to today's dollars. ILMN's ROIC of 13.8% shows moderate capital returns.
How does WACC affect ILMN stock valuation?
WACC (Weighted Average Cost of Capital) is the discount rate in a DCF model — it reflects the minimum return investors require. For ILMN, with a debt-to-equity ratio of 0.92x, the capital structure directly influences WACC. A 1% increase in WACC typically reduces the intrinsic value by 10-15%. At an EV/EBITDA of 18.3x, the market's implied discount rate can be reverse-engineered for comparison. In MiniValuator you set this discount rate yourself as a single editable number, 10% by default, instead of computing a formal WACC.
Learn More
- See ILMN PE Valuation → — Earnings-based stock valuation using PE ratio analysis
- DCF Methodology — Step-by-step guide to discounted cash flow analysis
- PE Methodology — Guide to PE ratio stock valuation
- WACC — Understanding the discount rate used in DCF
- Margin of Safety — How to evaluate downside protection
- Intrinsic Value — How to evaluate stock fair value
- How to Calculate Intrinsic Value — Complete guide for investors
Related Valuations
All Healthcare valuationsDCF and P/E value ILMN with different methods and assumptions, so the two conclusions can differ. Compare the P/E fair value.
Price as of 2026-06-12. Financial data from Financial Modeling Prep (trailing twelve months) · Valuation methodology by Charlie Wang.
This is an estimate, not investment advice.