Illumina, Inc. (ILMN) Stock Analysis

Illumina’s principal competitive advantage is its dominant position in next-generation sequencing (NGS), underpinned by a large installed base—over 22,000 sequencers globally as of 2025—and a comprehensive, integrated workflow. This scale creates high switching costs for customers, as laboratories standardize protocols, data formats, and informatics around Illumina’s systems. The company’s recurring revenue model—over 80% of revenue from consumables and services—provides stability and customer lock-in.

Technological leadership is another key edge. Illumina’s NovaSeq X platform, for example, has reduced the cost per high-throughput gigabase to $3.40 in 2024, down from $19.20 in 2015, outpacing most rivals. The company’s proprietary sequencing-by-synthesis chemistry and robust informatics suite (notably the DRAGEN platform) further differentiate its offering.

Customer satisfaction is reflected in Illumina’s brand strength and scientific mindshare: the majority of published genomics research references Illumina technology. The company’s global reach—serving over 9,500 customers in 155 countries—also provides scale advantages in distribution and support.

While competitors such as Thermo Fisher, BGI, and Oxford Nanopore are innovating, none match Illumina’s breadth, installed base, or ecosystem integration. However, regulatory and geopolitical risks (notably in China), as well as ongoing price competition, remain threats to its moat. Illumina’s culture of sustained R&D investment (over $1 billion in 2022) supports its innovation pipeline, reinforcing its competitive position.