雅虎香港財經 Here's Why You Should Retain PacBio (PACB) Stock for Now
Pacific Biosciences of California, Inc. PACB, popularly known as PacBio, is well-poised for growth in the coming quarters, courtesy of its slew of strategic deals over the past few months. The optimism, led by a solid first-quarter 2023 performance and its product development activities, is expected to contribute further. However, stiff competition and production bottlenecks persist.
Over the past year, this Zacks Rank #3 (Hold) stock has gained 152.7% compared with 1% growth of the industry and the 3.2% rise of the S&P 500.
The renowned global provider of sequencing systems has a market capitalization of $3.21 billion. The company projects 10.1% growth for 2023 and expects to maintain a strong performance. PacBio’s earnings surpassed the Zacks Consensus Estimate in two of the trailing four quarters and broke even in the other two, the average surprise being 3.7%.
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Let’s delve deeper.
Strategic Deals: We are optimistic about PacBio’s robust growth opportunities via its inking of a slew of strategic deals over the past few months. On its first-quarter 2023 earnings call in May, PacBio’s management stated that the Revio system had been reviving legacy PacBio customers' interest in leveraging long-reads. This includes the Weill Cornell Medical Center, which ordered Revio for its genomic score.
In January, the company announced a collaboration with the University of Tokyo, Graduate School of Medicine to study the use of long-read sequencing and novel bioinformatics methods to better understand the genetic causes of certain rare diseases in individuals and cohorts within the Japanese population.
Product Development Activities: We are optimistic about PacBio's solid potential in the RNA-sequencing market, which has been fortifying the company’s footprint worldwide. On its first-quarter 2023 earnings call, PacBio’s management stated that the demand for its new Revio system continued to be robust, with orders in the first quarter outpacing its shipments of Revio, resulting in a net increase of instrument backlog.
In April, PacBio announced the availability of its new high-throughput Nanobind DNA Extraction kits, another key product from its Circulomics acquisition.
Strong Q1 Results: PacBio saw a robust increase in its overall top line, including strong revenues from Instrument and Consumables in the first quarter of 2023. Solid performances in Asia-Pacific and Europe, the Middle East & Africa regions were also recorded. Continued strong prospects of the Revio and Onso systems, with customers placing orders for these, looked promising for the stock.
Downsides
Production Bottlenecks: PacBio must successfully manage new product introductions and transitions, including the Single Molecule, Real-Time Cell 8M and Sequel II/IIe Systems. However, the company may incur high costs during these transitions, which may not result in the anticipated benefits.
Stiff Competition: PacBio operates in a highly competitive market where its competitors offer nucleic acid sequencing equipment or consumables. Many of these companies currently have greater resources and may be able to respond more quickly and effectively than PacBio to new or changing opportunities, technologies, standards, or customer requirements.
Estimate Trend
PacBio has been witnessing a flat estimate revision trend for 2023. Over the past 90 days, the Zacks Consensus Estimate for its loss per share has remained stable at $1.24.
The Zacks Consensus Estimate for the company’s second-quarter 2023 revenues is pegged at $40.3 million, suggesting a 13.7% uptick from the year-ago quarter’s reported number.
Key Picks
Some better-ranked stocks in the broader medical space are Hologic, Inc. HOLX, Merit Medical Systems, Inc. MMSI and Boston Scientific Corporation BSX.
Hologic, carrying a Zacks Rank #2 (Buy) at present, has an estimated growth rate of 5.1% for fiscal 2024. HOLX’s earnings surpassed estimates in all the trailing four quarters, the average being 27.3%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Hologic has gained 5.4% compared with the industry’s 1% growth in the past year.
Merit Medical, carrying a Zacks Rank #2 at present, has an estimated long-term growth rate of 11%. MMSI’s earnings surpassed estimates in all the trailing four quarters, the average surprise being 20.2%.
Merit Medical has gained 34.6% compared with the industry’s 7.4% rise over the past year.
Boston Scientific, carrying a Zacks Rank #2 at present, has an estimated long-term growth rate of 11.5%. BSX’s earnings surpassed estimates in two of the trailing four quarters and missed in the other two, the average surprise being 1.9%.
Boston Scientific has gained 29.4% against the industry’s 32% decline over the past year.
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