Price to FCFE (P/FCFE)
Free Cash Flow to Equity (FCFE)
Illumina Inc., FCFE calculation
US$ in millions
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).
The financial performance from 2016 to 2020 demonstrates a steady increase in operational cash generation contrasted by significant volatility in the cash flow available to equity holders.
- Operating Cash Flow Trends
- Net cash provided by operating activities exhibited consistent growth between 2016 and 2018, rising from 687 million USD to 1,142 million USD. A marginal decline occurred in 2019 to 1,051 million USD, followed by a slight recovery to 1,080 million USD by the end of 2020, indicating a stabilized capacity to generate cash from core business operations.
- Free Cash Flow to Equity (FCFE) Volatility
- FCFE experienced substantial variance over the analyzed period. After an initial increase from 366 million USD in 2016 to a peak of 1,577 million USD in 2018, FCFE dropped sharply to 292 million USD in 2019. A recovery was observed in 2020, with values increasing to 891 million USD.
- Analysis of Cash Flow Divergence
- A notable divergence between operating cash flow and FCFE occurred in 2018, where FCFE exceeded operating cash flow by 435 million USD, suggesting a period of net debt issuance or a significant reduction in capital expenditures. Conversely, in 2019, FCFE was substantially lower than operating cash flow, representing a gap of 759 million USD, which implies intensified capital investments or substantial debt repayments during that fiscal year.
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Price to FCFE Ratio, Current
Illumina Inc., current P/FCFE calculation, comparison to benchmarks
| No. shares of common stock outstanding | 156,300,000 |
| Selected Financial Data (US$) | |
| Free cash flow to equity (FCFE) (in millions) | 891) |
| FCFE per share | 5.70 |
| Current share price (P) | 408.14 |
| Valuation Ratio | |
| P/FCFE | 71.60 |
| Benchmarks | |
| P/FCFE, Competitors1 | |
| AbbVie Inc. | 29.80 |
| Amgen Inc. | 104.24 |
| Bristol-Myers Squibb Co. | 16.65 |
| Danaher Corp. | 25.78 |
| Eli Lilly & Co. | 78.34 |
| Gilead Sciences Inc. | 27.60 |
| Johnson & Johnson | 22.42 |
| Merck & Co. Inc. | 15.54 |
| Pfizer Inc. | 19.33 |
| Regeneron Pharmaceuticals Inc. | 25.37 |
| Thermo Fisher Scientific Inc. | 22.06 |
| Vertex Pharmaceuticals Inc. | 44.43 |
Based on: 10-K (reporting date: 2020-12-31).
1 Click competitor name to see calculations.
If the company P/FCFE is lower then the P/FCFE of benchmark then company is relatively undervalued.
Otherwise, if the company P/FCFE is higher then the P/FCFE of benchmark then company is relatively overvalued.
Price to FCFE Ratio, Historical
Illumina Inc., historical P/FCFE calculation, comparison to benchmarks
| Dec 31, 2020 | Dec 29, 2019 | Dec 30, 2018 | Dec 31, 2017 | Dec 31, 2016 | ||
|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | 145,900,000 | 147,000,000 | 147,000,000 | 147,000,000 | 146,300,000 | |
| Selected Financial Data (US$) | ||||||
| Free cash flow to equity (FCFE) (in millions)2 | 891) | 292) | 1,577) | 561) | 366) | |
| FCFE per share3 | 6.11 | 1.99 | 10.73 | 3.82 | 2.50 | |
| Share price1, 4 | 494.24 | 296.00 | 292.20 | 220.44 | 164.46 | |
| Valuation Ratio | ||||||
| P/FCFE5 | 80.93 | 149.01 | 27.24 | 57.76 | 65.66 | |
| Benchmarks | ||||||
| P/FCFE, Competitors6 | ||||||
| AbbVie Inc. | — | — | — | — | — | |
| Amgen Inc. | — | — | — | — | — | |
| Bristol-Myers Squibb Co. | — | — | — | — | — | |
| Danaher Corp. | — | — | — | — | — | |
| Eli Lilly & Co. | — | — | — | — | — | |
| Gilead Sciences Inc. | — | — | — | — | — | |
| Johnson & Johnson | — | — | — | — | — | |
| Merck & Co. Inc. | — | — | — | — | — | |
| Pfizer Inc. | — | — | — | — | — | |
| Regeneron Pharmaceuticals Inc. | — | — | — | — | — | |
| Thermo Fisher Scientific Inc. | — | — | — | — | — | |
| Vertex Pharmaceuticals Inc. | — | — | — | — | — | |
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).
1 Data adjusted for splits and stock dividends.
3 2020 Calculation
FCFE per share = FCFE ÷ No. shares of common stock outstanding
= 891,000,000 ÷ 145,900,000 = 6.11
4 Closing price as at the filing date of Illumina Inc. Annual Report.
5 2020 Calculation
P/FCFE = Share price ÷ FCFE per share
= 494.24 ÷ 6.11 = 80.93
6 Click competitor name to see calculations.
Analysis of the Price to Free Cash Flow to Equity (P/FCFE) metrics reveals a period of significant valuation volatility between 2016 and 2020. While the share price maintained a consistent upward trajectory, the FCFE per share experienced substantial fluctuations, leading to erratic movements in the P/FCFE ratio.
- Share Price Trends
- A consistent growth pattern is observed in the share price, which increased from 164.46 in 2016 to 494.24 in 2020. The most significant appreciation occurred between 2019 and 2020, during which the price rose from 296.00 to 494.24.
- FCFE per Share Performance
- Cash flow to equity exhibited high volatility over the analyzed period. FCFE per share rose from 2.50 in 2016 to a peak of 10.73 in 2018, followed by a sharp contraction to 1.99 in 2019. A recovery was noted in 2020, with the value increasing to 6.11.
- P/FCFE Ratio Interpretation
- The P/FCFE ratio shifted from 65.66 in 2016 to a low of 27.24 in 2018, suggesting that cash flow growth initially outpaced the increase in share price. A dramatic spike to 149.01 occurred in 2019, driven primarily by the precipitous decline in FCFE per share rather than a change in market price. In 2020, the ratio moderated to 80.93 as the increase in cash flow partially mitigated the impact of the surge in share price.
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