Is Pacific Biosciences of California a Winner in the Diagnostics & Research Industry?

NASDAQ: PACB | Pacific Biosciences of California, Inc. News, Ratings, and Charts

PACB – Despite posting robust sales growth in its last quarter, Pacific Biosciences (PACB) failed to meet consensus sales estimates. In addition, the company continues to face severe headwinds in the guise of various economic uncertainties and pandemic-led disruptions. So, let’s evaluate if it’s worth betting on the stock now. Read on.

Pacific Biosciences of California, Inc. (PACB) in Menlo Park, Calif., provides life scientists with extremely precise sequencing technologies. The company’s unique equipment is based on single molecule, real-time Sequencing technology, which provides a complete picture of genomes, transcriptomes, and epigenomes, allowing access to the whole spectrum of genetic diversity in any organism.

The company’s shares are down 64.9% in price year-to-date and 22.2% over the past month to close yesterday’s trading session at $7.19. In addition, PACB failed to meet consensus sales estimates in its last reported quarter, which further weighed on its stock’s price performance.

PACB saw lower utilization in January, due mainly to pandemic-related effects and accompanying quarantines, which slowed lab production and, in some cases, prevented lab access. Along with the pandemic, the current economic environment has resulted in capital purchase delays in the first quarter, notably in EMEA.

Here is what could shape PACB’s performance in the near term:

Poor Bottom line Performance

PACB’s total revenue increased 32.7% year-over-year to $36.02 million for the three months ended Dec. 31, 2021. However, its operating expenses increased 130.2% from its year-ago value to $81.44 million. Its operating loss grew 169.7% year-over-year to $64.68 million. The company reported a $69.33 million net loss, compared to a net profit of $74.94 million in the prior-year period. Its loss per share came in at $0.31 over this period.

Poor Profitability

PACB’s 45.4% trailing-12-months gross profit margin is 17.9% lower than the 55.2% industry average. Its trailing-12-months asset turnover ratio of 0.11% is 68.8% lower than the 0.35% industry average. Also, its trailing-12-months ROA, net income margin and ROC are negative 9.03%, 138.9%, and 10.5%, respectively.

POWR Ratings Reflect Uncertainty

PACB has an overall D rating, which equates to Sell in our proprietary POWR Ratings system. The POWR ratings are calculated by considering 118 distinct factors, with each factor weighted to an optimal degree.

Our proprietary rating system also evaluates each stock based on eight distinct categories. PACB has a D grade for Stability and Quality. The stock’s 1.26  beta is consistent with its Stability grade. In addition, its poor profitability is in sync with the Quality grade.

Among 49 stocks in the D-rated Medical – Diagnostics/Research industry, PACB is ranked #42.

Beyond what I have stated above, you can view PACB ratings for Value, Momentum, Growth, and Sentiment here.

Click here to checkout our Healthcare Sector Report for 2022

Bottom Line

While the company reported solid revenue growth in its last quarter, it failed to meet analysts’ estimates. In addition, analysts expect its EPS to decline 47.7% in the current year. Furthermore, the stock is currently trading below its 50-day and 200-day moving average of $9.77 and $20.44, respectively, indicating a downtrend. So, we believe the stock is best avoided now.

How Does Pacific Biosciences of California Inc. (PACB) Stack Up Against its Peers?

While PACB has an overall D rating, one might want to consider its industry peers, Global Cord Blood Corporation (CO), Qiagen N.V. (QGEN), and Agilent Technologies Inc. (A), which have an overall A (Strong Buy) rating.

PACB shares fell $7.19 (-100.00%) in premarket trading Tuesday. Year-to-date, PACB has declined -64.86%, versus a -9.50% rise in the benchmark S&P 500 index during the same period.

About the Author: Pragya Pandey

Pragya is an equity research analyst and financial journalist with a passion for investing. In college she majored in finance and is currently pursuing the CFA program and is a Level II candidate. More...

More Resources for the Stocks in this Article

TickerPOWR RatingIndustry RankRank in Industry
PACBGet RatingGet RatingGet Rating
COGet RatingGet RatingGet Rating
QGENGet RatingGet RatingGet Rating
AGet RatingGet RatingGet Rating

Most Popular Stories on

These 5 Economic Reports Hold the Key for Stocks

Thanks to signs of easing inflation in May we have enjoyed a rally for stocks with the S&P 500 (SPY) making new all time highs. What happens next for stocks very much is tied to the results for these 5 upcoming economic reports. Steve Reitmeister previews these announcements with keys to what stocks do next. Read it all in the full article below...

NVIDIA (NVDA) Earnings Are Out: Here's What to Do

NVIDIA’s (NVDA) much-anticipated first-quarter earnings report comfortably surpassed analyst expectations, driven by massive demand for its AI chips. The chipmaker also announced a 10-to-1 stock split. Following an impressive financial performance, how should investors approach this stock? Read on to know more...

3 Gold Stocks With May Upside Potential

Gold’s prospects appear promising owing to rising disposable incomes, its appeal as a safe-haven asset, and the expected interest rate cuts later this year. Amid this backdrop, investors could consider buying quality gold stocks Eldorado Gold (EGO), Alamos Gold (AGI), and Centerra Gold (CGAU), given their strong upside potential. Read on...

3 Tech Stocks for Bullish Investors This Week

The technology industry is growing rapidly owing to the rapid adoption of emerging technologies and increased enterprise spending on digitization. Amid this backdrop, it could be wise to invest in quality tech stocks Ericsson (ERIC), Pure Storage (PSTG), and Proto Labs (PRLB) this week for substantial gains. Continue reading...

Stock Investors: Fade This Rally

Nice rally...but is it really built to last? That is what we have to ask ourselves as the S&P 500 (SPY) nears the all time highs. 44 year investment veteran Steve Reitmeister shares his updated market outlook which includes why there is likely not much more upside in the days in the head. Gladly, there are still ways to carve out profits from the market if you look in the right places. Just read on below for the full story...

Read More Stories

More Pacific Biosciences of California, Inc. (PACB) News View All

Event/Date Symbol News Detail Start Price End Price Change POWR Rating
Loading, please wait...
View All PACB News