Pacific Biosciences of California, Inc. PACB, popularly known as PacBio, is scheduled to release first-quarter 2024 results on May 9.
In the last reported quarter, the company’s adjusted loss per share of 27 cents was narrower than the Zacks Consensus Estimate of a loss of 31 cents per share. Over the trailing four quarters, its earnings outperformed the Zacks Consensus Estimate on all occasions, delivering an earnings surprise of 13.1%, on average.
Let’s see how things have shaped up prior to this announcement.
Factors at Play
Last month, PacBio announced preliminary revenues for first-quarter 2024. Per the preliminary report, first-quarter 2024 total revenues are estimated to be $38.8 million, down 0.3% year over year.
Per management, the preliminary revenues for the first quarter were below the company’s expectations due to an increasing number of customers delaying instrument purchases and softness in consumable shipments. Management also stated that all regions underperformed, with 13 Revio systems falling out of the forecast in the last two weeks of the first quarter. PacBio believes this primarily resulted from elongated customer purchasing cycles. This raises our apprehension about the stock.
At the time of the release of the preliminary first-quarter 2024 results, management stated that despite optimism regarding its growth prospects as PacBio entered 2024 following the successful launch of the Revio system and a record 2023, the revenues in the quarter were significantly lower than expected. Per management, during the last two weeks of the first quarter, there was an increasing number of customers delaying instrument purchases. The company also experienced some unexpected softness in consumable shipments. These factors, which led to the first quarter performing below PacBio’s original expectations, are expected to have an impact on its 2024 performance. This does not bode well for the stock.
The company’s instrument revenues are expected to be $19 million (down 8.2% year over year), while the consumables revenues are anticipated to be $16 million (up 14.3% year over year).
We estimate the Instrument revenues to be $27.2 million, while the Consumable revenues are expected to be $19.1 million in the first quarter.
Pacific Biosciences of California, Inc. Price and EPS Surprise
Pacific Biosciences of California, Inc. price-eps-surprise | Pacific Biosciences of California, Inc. Quote
However, PacBio is currently focused on improving commercial execution to drive adoption of both the Revio and Onso platforms, continuing the development of its benchtop long-read and high throughput short-read platforms and implementing projects to improve its gross margin and drive manufacturing efficiencies, among others. PacBio shipped 28 Revio sequencing systems for revenues during first-quarter 2024, thereby bringing the Revio installed base to 201 systems as of Mar 31, 2024. Of the 28 Revio systems shipped, 16 were shipped to new customers. Per management, Onso shipments increased sequentially as PacBio continued to ramp up its manufacturing capacity, achieving steady-state production levels at the end of the quarter. This looks promising for the stock.
Other notable developments during the to-be-reported quarter include the first Revio in Latin America to be used for a 1,000-sample whole genome project and pediatric genome initiatives at hospitals in Canada and Korea. Per PacBio, Revio utilization in March was at an all-time high, including some of its top customers exceeding expectations. The company has expanded the capabilities of the Revio platform through the roll-out of the v13 software upgrade. It also recently launched new reagent kits that improve its customer workflows and expects the new Kinnex kits to continue to drive new customer adoption.
The Estimate Picture
For first-quarter 2024, the Zacks Consensus Estimate of $38.8 million for total revenues calls for a decline of 0.3% from the prior-year reported figure.
The consensus estimate for loss per share is pegged at 26 cents.
What Our Model Suggests
Per our proven model, a stock with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold), along with a positive Earnings ESP, has higher chances of beating estimates. This is not the case here, as you can see below.
Earnings ESP: PacBio has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
Zacks Rank: The company currently carries a Zacks Rank #2.
Stocks Worth a Look
Here are a few medical stocks worth considering, as these have the right combination of elements to beat on earnings this reporting cycle.
Alcon Inc. ALC has an Earnings ESP of +1.88% and a Zacks Rank of 2. ALC has an estimated long-term growth rate of 12.8%. You can see the complete list of today’s Zacks #1 Rank stocks here.
Alcon’s earnings surpassed estimates in three of the trailing four quarters and missed once, with the average surprise being 7.4%.
Erasca, Inc. ERAS has an Earnings ESP of +12.20% and a Zacks Rank of 2. ERAS has an estimated long-term growth rate of 37.5%.
Erasca’s earnings surpassed estimates in all the trailing four quarters, with the average surprise being 17.6%.
IGM Biosciences, Inc. IGMS has an Earnings ESP of +1.69% and a Zacks Rank of 2. IGMS has an estimated growth rate of 31.4% for 2024.
IGM Biosciences’ earnings surpassed estimates in three of the trailing four quarters and broke even once, with the average surprise being 6.1%.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
