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Reasons to Retain PacBio Stock in Your Portfolio for Now
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Pacific Biosciences of California, Inc. (PACB - Free Report) , popularly known as PacBio, has been gaining from its continued focus on research and development. The optimism, led by decent second-quarter 2024 earnings and product development activities, is expected to contribute further. However, stiff competition and macroeconomic concerns persist.
In the year-to-date period, this Zacks Rank #3 (Hold) company’s shares have lost 79.1% against 6.6% growth of the industry. The S&P 500 composite has also gained 21.9% in the said time frame.
The renowned global provider of sequencing systems has a market capitalization of $558.7 million. The company projects 14.4% growth for 2024 and expects to maintain its strong performance going forward. PacBio’s earnings surpassed the Zacks Consensus Estimate in three of the trailing four quarters and met the same in one, delivering an average surprise of 9.89%.
Image Source: Zacks Investment Research
Let’s delve deeper.
Focus on R&D: We are optimistic about PacBio’s continued R&D efforts that focus on programs to develop new and existing platforms, increase throughput and decrease costs on behalf of its customers.
PacBio is working toward improving commercial execution to drive the adoption of the Revio and Onso platforms. The company scaled the manufacturing of the Onso platform during the first quarter, enabling it to deliver instruments based on demand much more rapidly. This strengthened its ability to sell the system.
Per management, PACB is also developing a high-throughput short-read platform that is expected to enable the company to serve high-throughput labs with PACB’s leading Sequencing by Binding technology. The company believes that it will be highly competitive in terms of both throughput and cost compared to offerings by competing companies. Per management, the addressable market for this platform is estimated to be more than $1 billion per year.
PacBio also continues to develop its next-generation SMRT cell. This cell is expected to power a new long-read platform, whose throughput exceeds the Revio system.
Product Development Activities: We are optimistic about PacBio's solid potential in the RNA-sequencing market that has been fortifying the company’s footprint worldwide. PACB recently announced the PureTarget repeat expansion panel, a new approach that enables thorough examination of 20 genes linked to severe neurological conditions, including difficult-to-sequence genes with tandem repeat expansions.
PacBio is also continuously collaborating with several companies to expand the reach and access of its products. Earlier this month, it signed an agreement with National Cancer Centre of Singapore to enhance Asian cancer research, leveraging PacBio's Onso short-read sequencing platform. Last month, PacBio announced a collaboration with HiFi Solves Sub-Fertility Consortium to pioneer advancements in diagnosing and treating subfertility and recurrent pregnancy loss using PACB’s HiFi long-read sequencing. In the same month, the company announced a collaboration with the University Hospital of Munster to use its Revio HiFi sequencing system to advance research on male infertility and rare diseases.
Mixed Q2 Results: PacBio exited the second quarter of 2024 with mixed results, wherein earnings beat the Zacks Consensus Estimate, but revenues missed the same.
PACB saw an uptick in Service and other revenues, as well as Consumables revenues. However, geographically, revenues declined in the Americas, Asia-Pacific region and EMEA, which seems concerning. A decrease in adjusted gross profit does not bode well for the stock. However, continued strong prospects in the Revio system, with customers placing orders for these, looked promising for the stock.
Downsides
Macroeconomic Concerns: Macroeconomic dynamics, including rising inflation and global supply-chain constraints, have negatively impacted PacBio’s customers and lengthened customer sales cycles. These factors may affect its revenues and operations throughout 2024.
Business Seasonality: Sales of the company’s sequencing instruments vary on a quarterly or yearly basis, contributing to the lengthy sales cycle and increasing the magnitude of quarterly or annual fluctuations in its operating results.
PacBio has been witnessing a stable estimate revision trend for the third quarter of 2024, ahead of its earnings. Over the past 60 days, the Zacks Consensus Estimate for its adjusted loss per share has remained unchanged at 20 cents.
The Zacks Consensus Estimate for revenues is pegged at $41.9 million, indicating a 24.8% decrease from the year-ago reported numbers.
Key Picks
Some better-ranked stocks in the broader medical space are DaVita Inc. (DVA - Free Report) , Baxter International Inc. (BAX - Free Report) and Boston Scientific Corporation (BSX - Free Report) .
DVA’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 24.2%. Its shares have surged 54.4% compared with the industry’s 18.2% growth so far this year.
Baxter, carrying a Zacks Rank of 2 at present, has an estimated long-term growth rate of 10%. BAX’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 3.7%.
Baxter has declined 4.5% against the industry’s 14.1% growth so far this year.
Boston Scientific, carrying a Zacks Rank of 2 at present, has an estimated long-term growth rate of 12.6%. BSX’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 7.2%.
Boston Scientific’s shares have rallied 61.5% compared with the industry’s 14.1% growth so far this year.
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Reasons to Retain PacBio Stock in Your Portfolio for Now
Pacific Biosciences of California, Inc. (PACB - Free Report) , popularly known as PacBio, has been gaining from its continued focus on research and development. The optimism, led by decent second-quarter 2024 earnings and product development activities, is expected to contribute further. However, stiff competition and macroeconomic concerns persist.
In the year-to-date period, this Zacks Rank #3 (Hold) company’s shares have lost 79.1% against 6.6% growth of the industry. The S&P 500 composite has also gained 21.9% in the said time frame.
The renowned global provider of sequencing systems has a market capitalization of $558.7 million. The company projects 14.4% growth for 2024 and expects to maintain its strong performance going forward. PacBio’s earnings surpassed the Zacks Consensus Estimate in three of the trailing four quarters and met the same in one, delivering an average surprise of 9.89%.
Image Source: Zacks Investment Research
Let’s delve deeper.
Focus on R&D: We are optimistic about PacBio’s continued R&D efforts that focus on programs to develop new and existing platforms, increase throughput and decrease costs on behalf of its customers.
PacBio is working toward improving commercial execution to drive the adoption of the Revio and Onso platforms. The company scaled the manufacturing of the Onso platform during the first quarter, enabling it to deliver instruments based on demand much more rapidly. This strengthened its ability to sell the system.
Per management, PACB is also developing a high-throughput short-read platform that is expected to enable the company to serve high-throughput labs with PACB’s leading Sequencing by Binding technology. The company believes that it will be highly competitive in terms of both throughput and cost compared to offerings by competing companies. Per management, the addressable market for this platform is estimated to be more than $1 billion per year.
PacBio also continues to develop its next-generation SMRT cell. This cell is expected to power a new long-read platform, whose throughput exceeds the Revio system.
Product Development Activities: We are optimistic about PacBio's solid potential in the RNA-sequencing market that has been fortifying the company’s footprint worldwide. PACB recently announced the PureTarget repeat expansion panel, a new approach that enables thorough examination of 20 genes linked to severe neurological conditions, including difficult-to-sequence genes with tandem repeat expansions.
PacBio is also continuously collaborating with several companies to expand the reach and access of its products. Earlier this month, it signed an agreement with National Cancer Centre of Singapore to enhance Asian cancer research, leveraging PacBio's Onso short-read sequencing platform. Last month, PacBio announced a collaboration with HiFi Solves Sub-Fertility Consortium to pioneer advancements in diagnosing and treating subfertility and recurrent pregnancy loss using PACB’s HiFi long-read sequencing. In the same month, the company announced a collaboration with the University Hospital of Munster to use its Revio HiFi sequencing system to advance research on male infertility and rare diseases.
Mixed Q2 Results: PacBio exited the second quarter of 2024 with mixed results, wherein earnings beat the Zacks Consensus Estimate, but revenues missed the same.
PACB saw an uptick in Service and other revenues, as well as Consumables revenues. However, geographically, revenues declined in the Americas, Asia-Pacific region and EMEA, which seems concerning. A decrease in adjusted gross profit does not bode well for the stock. However, continued strong prospects in the Revio system, with customers placing orders for these, looked promising for the stock.
Downsides
Macroeconomic Concerns: Macroeconomic dynamics, including rising inflation and global supply-chain constraints, have negatively impacted PacBio’s customers and lengthened customer sales cycles. These factors may affect its revenues and operations throughout 2024.
Business Seasonality: Sales of the company’s sequencing instruments vary on a quarterly or yearly basis, contributing to the lengthy sales cycle and increasing the magnitude of quarterly or annual fluctuations in its operating results.
Pacific Biosciences of California, Inc. Price
Pacific Biosciences of California, Inc. price | Pacific Biosciences of California, Inc. Quote
Estimate Trend
PacBio has been witnessing a stable estimate revision trend for the third quarter of 2024, ahead of its earnings. Over the past 60 days, the Zacks Consensus Estimate for its adjusted loss per share has remained unchanged at 20 cents.
The Zacks Consensus Estimate for revenues is pegged at $41.9 million, indicating a 24.8% decrease from the year-ago reported numbers.
Key Picks
Some better-ranked stocks in the broader medical space are DaVita Inc. (DVA - Free Report) , Baxter International Inc. (BAX - Free Report) and Boston Scientific Corporation (BSX - Free Report) .
DaVita, carrying a Zacks Rank #2 (Buy) at present, has an estimated long-term growth rate of 17.5%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
DVA’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 24.2%. Its shares have surged 54.4% compared with the industry’s 18.2% growth so far this year.
Baxter, carrying a Zacks Rank of 2 at present, has an estimated long-term growth rate of 10%. BAX’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 3.7%.
Baxter has declined 4.5% against the industry’s 14.1% growth so far this year.
Boston Scientific, carrying a Zacks Rank of 2 at present, has an estimated long-term growth rate of 12.6%. BSX’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 7.2%.
Boston Scientific’s shares have rallied 61.5% compared with the industry’s 14.1% growth so far this year.