Is Illumina Inc (ILMN) overvalued?
On Equity Rank's model estimate, ILMN trades 35% above its fair value. Illumina Inc (ILMN) last closed at $213.13; the multi-method model fair value is $157.79.
| Price | Model fair value | Price vs model |
|---|---|---|
| $213.13 | $157.79 | 35% above |
What the answer rests on
- 0 of 9 valuation methods put ILMN's value above its price and 9 put it below, so the methods mostly agree.
- To justify today's price, ILMN's free cash flow would need to grow about 18.9% a year for ten years (a reverse discounted cash flow). Over the last three years it actually grew 106.3% a year.
- ILMN trades at 39.0 times its last year's earnings, against a median of 37.5 for 26 profitable Life Sciences Tools companies.
- Over the past year the price sat below the model fair value on 1% of trading days. The gap ranged from 1% below to 48% above the model fair value.
Read this before relying on it
The model fair value is an estimate from published financial statements. It is not a forecast of where the price goes, and it can be wrong. Within 10% either side we call it close to fair value: valuation models are not precise enough to read more into a smaller gap. Our own lists have no proven edge over the market yet; the live record shows every result, misses included.
Every valuation method behind ILMN's fair value · What prices assume · Other companies