Friday, December 27, 2013

The Motley Fool: Can Anything Stop Illumina?

There aren't many companies that have done what Illumina, (NASDAQ: ILMN  ) has done. Illumina does not have monopoly share, but it also doesn't have much to worry about today in terms of competition. I have my doubts as to whether Thermo Fisher Scientific (NYSE: TMO  ) is truly prepared to invest the sort of sums into R&D that it will take to make Life Technologies Corp.  (NASDAQ: LIFE  ) a true neck-and-neck long-term rival, and Oxford Nanopore has struggled to deliver its systems to market on time.

The biggest problem with Illumina is the price. I realize growth investors are famously ambivalent about valuation, but it looks to me as though the market is pricing in over 20% long-term free cash flow growth for Illumina. At that pace, the company would have well over $5 billion in revenue in 2022 and the sort of free cash flow margins that even the best med-tech, pharmaceutical, diagnostics, and life sciences companies struggle to match.

Read the full article at The Motley Fool:
Can Anything Stop Illumina?

No comments: