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With 45% Earnings Growth, Did Illumina, Inc. (NASDAQ:ILMN) Outperform The Industry?

Simply Wall St

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.

View our latest analysis for Illumina

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.

NasdaqGS:ILMN Income Statement, September 9th 2019

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:

  1. 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.
  2. 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.
  3. 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.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.