Stock Analysis on Net

Illumina Inc. (NASDAQ:ILMN)

$22.49

This company has been moved to the archive! The financial data has not been updated since November 5, 2021.

Present Value of Free Cash Flow to Equity (FCFE)

Microsoft Excel

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Intrinsic Stock Value (Valuation Summary)

Illumina Inc., free cash flow to equity (FCFE) forecast

US$ in millions, except per share data

Microsoft Excel
Year Value FCFEt or Terminal value (TVt) Calculation Present value at
01 FCFE0
1 FCFE1 = × (1 + )
2 FCFE2 = × (1 + )
3 FCFE3 = × (1 + )
4 FCFE4 = × (1 + )
5 FCFE5 = × (1 + )
5 Terminal value (TV5) = × (1 + ) ÷ ()
Intrinsic value of Illumina Inc. common stock
 
Intrinsic value of Illumina Inc. common stock (per share)
Current share price

Based on: 10-K (reporting date: 2020-12-31).

Disclaimer!
Valuation is based on standard assumptions. There may exist specific factors relevant to stock value and omitted here. In such a case, the real stock value may differ significantly form the estimated. If you want to use the estimated intrinsic stock value in investment decision making process, do so at your own risk.


Required Rate of Return (r)

Microsoft Excel
Assumptions
Rate of return on LT Treasury Composite1 RF
Expected rate of return on market portfolio2 E(RM)
Systematic risk of Illumina Inc. common stock βILMN
 
Required rate of return on Illumina Inc. common stock3 rILMN

1 Unweighted average of bid yields on all outstanding fixed-coupon U.S. Treasury bonds neither due or callable in less than 10 years (risk-free rate of return proxy).

2 See details »

3 rILMN = RF + βILMN [E(RM) – RF]
= + []
=


FCFE Growth Rate (g)

FCFE growth rate (g) implied by PRAT model

Illumina Inc., PRAT model

Microsoft Excel
Average Dec 31, 2020 Dec 29, 2019 Dec 30, 2018 Dec 31, 2017 Dec 31, 2016
Selected Financial Data (US$ in millions)
Net income attributable to Illumina stockholders
Revenue
Total assets
Total Illumina stockholders’ equity
Financial Ratios
Retention rate1
Profit margin2
Asset turnover3
Financial leverage4
Averages
Retention rate
Profit margin
Asset turnover
Financial leverage
 
FCFE growth rate (g)5

Based on: 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-29), 10-K (reporting date: 2018-12-30), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31).

2020 Calculations

1 Company does not pay dividends

2 Profit margin = 100 × Net income attributable to Illumina stockholders ÷ Revenue
= 100 × ÷
=

3 Asset turnover = Revenue ÷ Total assets
= ÷
=

4 Financial leverage = Total assets ÷ Total Illumina stockholders’ equity
= ÷
=

5 g = Retention rate × Profit margin × Asset turnover × Financial leverage
= × × ×
=


FCFE growth rate (g) implied by single-stage model

g = 100 × (Equity market value0 × r – FCFE0) ÷ (Equity market value0 + FCFE0)
= 100 × ( × ) ÷ ( + )
=

where:
Equity market value0 = current market value of Illumina Inc. common stock (US$ in millions)
FCFE0 = the last year Illumina Inc. free cash flow to equity (US$ in millions)
r = required rate of return on Illumina Inc. common stock


FCFE growth rate (g) forecast

Illumina Inc., H-model

Microsoft Excel
Year Value gt
1 g1
2 g2
3 g3
4 g4
5 and thereafter g5

where:
g1 is implied by PRAT model
g5 is implied by single-stage model
g2, g3 and g4 are calculated using linear interpoltion between g1 and g5

Calculations

g2 = g1 + (g5g1) × (2 – 1) ÷ (5 – 1)
= + () × (2 – 1) ÷ (5 – 1)
=

g3 = g1 + (g5g1) × (3 – 1) ÷ (5 – 1)
= + () × (3 – 1) ÷ (5 – 1)
=

g4 = g1 + (g5g1) × (4 – 1) ÷ (5 – 1)
= + () × (4 – 1) ÷ (5 – 1)
=