Examining Illumina, Inc.'s (NASDAQ:ILMN) past track record of performance is a useful exercise for investors. It allows us to reflect on whether the company has met or exceed expectations, which is a powerful signal for future performance. Below, I will assess ILMN's latest performance announced on 30 June 2019 and weight these figures against its longer term trend and industry movements.
How Well Did ILMN Perform?
ILMN's trailing twelve-month earnings (from 30 June 2019) of US$938m has jumped 45% compared to the previous year.
Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of 20%, indicating the rate at which ILMN is growing has accelerated. How has it been able to do this? Well, let’s take a look at if it is only due to industry tailwinds, or if Illumina has seen some company-specific growth.
In terms of returns from investment, Illumina has invested its equity funds well leading to a 21% return on equity (ROE), above the sensible minimum of 20%. Furthermore, its return on assets (ROA) of 13% exceeds the US Life Sciences industry of 6.9%, indicating Illumina has used its assets more efficiently. However, its return on capital (ROC), which also accounts for Illumina’s debt level, has declined over the past 3 years from 17% to 13%.
What does this mean?
Illumina's track record can be a valuable insight into its earnings performance, but it certainly doesn't tell the whole story. Positive growth and profitability are what investors like to see in a company’s track record, but how do we properly assess sustainability? I recommend you continue to research Illumina to get a more holistic view of the stock by looking at:
- Future Outlook: What are well-informed industry analysts predicting for ILMN’s future growth? Take a look at our free research report of analyst consensus for ILMN’s outlook.
- Financial Health: Are ILMN’s operations financially sustainable? Balance sheets can be hard to analyze, which is why we’ve done it for you. Check out our financial health checks here.
- Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.
NB: Figures in this article are calculated using data from the trailing twelve months from 30 June 2019. This may not be consistent with full year annual report figures.
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