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Measuring Illumina, Inc.'s (NASDAQ:ILMN) track record of past performance is an insightful exercise for investors. It enables 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 recent performance announced on 30 December 2018 and compare these figures to its historical trend and industry movements.
Did ILMN's recent earnings growth beat the long-term trend and the industry?
ILMN's trailing twelve-month earnings (from 30 December 2018) of US$826m has jumped 14% compared to the previous year.
However, this one-year growth rate has been lower than its average earnings growth rate over the past 5 years of 23%, indicating the rate at which ILMN is growing has slowed down. What could be happening here? Well, let’s take a look at what’s occurring with margins and whether the whole industry is facing the same headwind.
In terms of returns from investment, Illumina has invested its equity funds well leading to a 20% return on equity (ROE), above the sensible minimum of 20%. Furthermore, its return on assets (ROA) of 12% 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 20% to 17%.
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? You should 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 December 2018. 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 firstname.lastname@example.org. 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.