What is Illumina’s (ILMN) Economic Moat, and is it Widening or Narrowing?

What happened: Illumina (NASDAQ:ILMN) traded around $268 on October 7, down 2.11% on the day but up 183.61% over twelve months, as revenue grew while earnings fell. Key numbers: Revenue +9.40% in the most recent quarter, earnings -11.90%. Gross margin 67.93%, operating margin 21.14%, net margin 18.34%, ROE 32.34%. Why it matters: The content frames rising revenue with falling profit as a narrowing moat, since consumables are no longer priced at will. It says the market has priced the slowdown rather than the margin, and that the PEG ratio does not support the multiple. Market: +2.2% by next close ($114.65 on Oct 12), +35.1% YTD

Illumina (NASDAQ:ILMN) traded around $268 on October 7, down 2.11% on the day but up 183.61% over twelve months, as revenue grew while earnings fell.

The content frames rising revenue with falling profit as a narrowing moat, since consumables are no longer priced at will. It says the market has priced the slowdown rather than the margin, and that the PEG ratio does not support the multiple. Market: +2.2% by next close ($114.65 on Oct 12), +35.1% YTD