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Here's Why You Should Retain PacBio Stock in Your Portfolio for Now
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Key Takeaways
PacBio's Q2 results topped estimates, driven by strong Service and Consumables revenue growth.
Revio and Vega platforms boosted adoption, with installed bases reaching 297 and 73 systems, respectively.
Longer purchasing cycles tied to funding constraints may weigh on short-term revenue momentum.
Pacific Biosciences of California, Inc. (PACB - Free Report) , popularly known as PacBio, has been gaining from its continued product development. The optimism, led by strong second-quarter results, is expected to contribute further. However, concerns about long purchasing cycles persist.
In the year-to-date period, this Zacks Rank #3 (Hold) company’s shares have lost 16.4% compared with the 7.6% decline of the industry. The S&P 500 Composite has improved 15.6% in the said time frame.
The renowned global provider of sequencing systems has a market capitalization of $453.6 million. The company projects 27.7% growth for 2025 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 once, delivering an average surprise of 15.2%.
Image Source: Zacks Investment Research
Factors Favoring PACB’s Growth
Sequencing Technologies Strengthen Market Leadership:PacBio differentiates itself in the genomics industry through its proprietary HiFi long-read sequencing, based on Single-Molecule Real-Time (SMRT) technology. This technology enables the high-accuracy, real-time detection of complex genomic structures, such as structural variations, haplotypes, and epigenetic modifications.
The global SMRT market, valued at $2.74 billion in 2023, is projected to reach $4.14 billion by 2031, registering a CAGR of 5.3%. Additionally, PacBio has expanded its offerings by integrating Sequencing by Binding chemistry with the launch of its Onso system in 2022, a short-read platform delivering ≥90% of bases at Q40+ accuracy, 15 times more precise than traditional sequencing methods. By providing both long-read and short-read technologies, PacBio uniquely serves diverse research and clinical applications while driving down costs and enhancing variant detection.
Robust Product Portfolio Driving Growth: PacBio is seeing strong momentum as its Revio and Vega systems drive adoption across research, clinical and population genomics. The Revio platform remains the star performer — with 15 new systems shipped in second-quarter 2025, bringing the installed base to 297.
The recent Spark chemistry upgrade has boosted throughput by 33%, cut DNA input fourfold and lowered sequencing costs, helping output surge 66% year over year. Notably, about one-third of new placements came from diagnostic and hospital labs, with names like Variantyx, GeneDx and several European hospitals using Revio for rare disease testing — a clear sign of growing clinical traction.
Meanwhile, the Vega benchtop system is expanding PacBio’s footprint in academic and smaller clinical settings. With 38 systems shipped in the second quarter, its installed base hit 73, nearly 60% of them to new customers.
Vega’s affordability and versatility are winning over labs focused on microbial, targeted and single-cell applications, while also complementing Revio in capital-tight markets. Backed by rising consumables sales, expanding RNA kit adoption and new population genomics collaborations, including with Target ALS and China’s Haorui Gene, PacBio is strengthening its position as a leader in long-read sequencing and remains on track toward cash flow breakeven by 2027.
Solid Q2 Results: PacBio delivered better-than-expected results in the second quarter of 2025, with both earnings and revenues surpassing the Zacks Consensus Estimate. Growth was fueled by strong performance in Service and Consumables revenues, while margin expansion and a reduced operating loss highlighted improving operational efficiency.
A key achievement during the second quarter was the publication of the Platinum Pedigree benchmark in Nature Methods, developed using PacBio’s HiFi sequencing technology. As the most comprehensive family-based variant dataset published to date, it sets a new gold standard for analyzing complex genomic variation and significantly improves the accuracy of AI-based variant calling tools, reinforcing PacBio’s technological edge.
A Factor That May Offset the Gains for PACB
Longer Purchasing Cycles: PacBio is facing longer sales cycles for its high-cost Revio sequencing system as customers navigate funding uncertainties and tighter capital budgets. The company has reported that academic and government-backed institutions, particularly in the United States, are delaying purchasing decisions due to National Institutes of Health budget freezes and funding constraints.
Additionally, macroeconomic pressures in the Asia-Pacific region are contributing to slower procurement timelines, further impacting instrument sales. These delays in customer decision-making could limit near-term revenue growth and create quarterly revenue volatility.
Estimate Trend
PacBio has been witnessing a stable estimate revision trend for 2025. Over the past 60 days, the Zacks Consensus Estimate for its adjusted loss per share has remained stable at 60 cents.
The Zacks Consensus Estimate for 2025 revenues is pegged at $158.8 million, indicating a 3.1% increase from the year-ago reported numbers.
Masimo shares have lost 10.4% so far this year compared with the industry’s 7.4% decline. Estimates for the company’s 2025 earnings per share have increased 1.3% to $5.30 in the past 30 days.
MASI’s earnings beat estimates in each of the trailing four quarters, the average surprise being 13.8%. In the last reported quarter, it posted an earnings surprise of 8.1%.
Estimates for Merit Medical’s 2025 earnings per share have increased 0.8% to $3.63 in the past 60 days. Shares of the company have lost 13.8% so far this year against the industry’s 1.1% growth.
MMSI’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 12.92%. In the last reported quarter, it delivered an earnings surprise of 17.44%.
Estimates for West Pharmaceutical’s 2025 earnings per share have increased 1.2% to $6.74 in the past 60 days. Shares of the company have lost 18.2% so far this year against the industry’s 1% growth.
WST’s earnings beat estimates in each of the trailing four quarters, the average surprise being 16.81%. In the last reported quarter, it delivered an earnings surprise of 21.85%.
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Here's Why You Should Retain PacBio Stock in Your Portfolio for Now
Key Takeaways
Pacific Biosciences of California, Inc. (PACB - Free Report) , popularly known as PacBio, has been gaining from its continued product development. The optimism, led by strong second-quarter results, is expected to contribute further. However, concerns about long purchasing cycles persist.
In the year-to-date period, this Zacks Rank #3 (Hold) company’s shares have lost 16.4% compared with the 7.6% decline of the industry. The S&P 500 Composite has improved 15.6% in the said time frame.
The renowned global provider of sequencing systems has a market capitalization of $453.6 million. The company projects 27.7% growth for 2025 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 once, delivering an average surprise of 15.2%.
Image Source: Zacks Investment Research
Factors Favoring PACB’s Growth
Sequencing Technologies Strengthen Market Leadership:PacBio differentiates itself in the genomics industry through its proprietary HiFi long-read sequencing, based on Single-Molecule Real-Time (SMRT) technology. This technology enables the high-accuracy, real-time detection of complex genomic structures, such as structural variations, haplotypes, and epigenetic modifications.
The global SMRT market, valued at $2.74 billion in 2023, is projected to reach $4.14 billion by 2031, registering a CAGR of 5.3%. Additionally, PacBio has expanded its offerings by integrating Sequencing by Binding chemistry with the launch of its Onso system in 2022, a short-read platform delivering ≥90% of bases at Q40+ accuracy, 15 times more precise than traditional sequencing methods. By providing both long-read and short-read technologies, PacBio uniquely serves diverse research and clinical applications while driving down costs and enhancing variant detection.
Robust Product Portfolio Driving Growth: PacBio is seeing strong momentum as its Revio and Vega systems drive adoption across research, clinical and population genomics. The Revio platform remains the star performer — with 15 new systems shipped in second-quarter 2025, bringing the installed base to 297.
The recent Spark chemistry upgrade has boosted throughput by 33%, cut DNA input fourfold and lowered sequencing costs, helping output surge 66% year over year. Notably, about one-third of new placements came from diagnostic and hospital labs, with names like Variantyx, GeneDx and several European hospitals using Revio for rare disease testing — a clear sign of growing clinical traction.
Meanwhile, the Vega benchtop system is expanding PacBio’s footprint in academic and smaller clinical settings. With 38 systems shipped in the second quarter, its installed base hit 73, nearly 60% of them to new customers.
Vega’s affordability and versatility are winning over labs focused on microbial, targeted and single-cell applications, while also complementing Revio in capital-tight markets. Backed by rising consumables sales, expanding RNA kit adoption and new population genomics collaborations, including with Target ALS and China’s Haorui Gene, PacBio is strengthening its position as a leader in long-read sequencing and remains on track toward cash flow breakeven by 2027.
Solid Q2 Results: PacBio delivered better-than-expected results in the second quarter of 2025, with both earnings and revenues surpassing the Zacks Consensus Estimate. Growth was fueled by strong performance in Service and Consumables revenues, while margin expansion and a reduced operating loss highlighted improving operational efficiency.
A key achievement during the second quarter was the publication of the Platinum Pedigree benchmark in Nature Methods, developed using PacBio’s HiFi sequencing technology. As the most comprehensive family-based variant dataset published to date, it sets a new gold standard for analyzing complex genomic variation and significantly improves the accuracy of AI-based variant calling tools, reinforcing PacBio’s technological edge.
A Factor That May Offset the Gains for PACB
Longer Purchasing Cycles: PacBio is facing longer sales cycles for its high-cost Revio sequencing system as customers navigate funding uncertainties and tighter capital budgets. The company has reported that academic and government-backed institutions, particularly in the United States, are delaying purchasing decisions due to National Institutes of Health budget freezes and funding constraints.
Additionally, macroeconomic pressures in the Asia-Pacific region are contributing to slower procurement timelines, further impacting instrument sales. These delays in customer decision-making could limit near-term revenue growth and create quarterly revenue volatility.
Estimate Trend
PacBio has been witnessing a stable estimate revision trend for 2025. Over the past 60 days, the Zacks Consensus Estimate for its adjusted loss per share has remained stable at 60 cents.
The Zacks Consensus Estimate for 2025 revenues is pegged at $158.8 million, indicating a 3.1% increase from the year-ago reported numbers.
Key Picks
Some better-ranked stocks in the broader medical space are Masimo (MASI - Free Report) , Merit Medical System (MMSI - Free Report) and West Pharmaceutical Services (WST - Free Report) . Each stock presently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Masimo shares have lost 10.4% so far this year compared with the industry’s 7.4% decline. Estimates for the company’s 2025 earnings per share have increased 1.3% to $5.30 in the past 30 days.
MASI’s earnings beat estimates in each of the trailing four quarters, the average surprise being 13.8%. In the last reported quarter, it posted an earnings surprise of 8.1%.
Estimates for Merit Medical’s 2025 earnings per share have increased 0.8% to $3.63 in the past 60 days. Shares of the company have lost 13.8% so far this year against the industry’s 1.1% growth.
MMSI’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 12.92%. In the last reported quarter, it delivered an earnings surprise of 17.44%.
Estimates for West Pharmaceutical’s 2025 earnings per share have increased 1.2% to $6.74 in the past 60 days. Shares of the company have lost 18.2% so far this year against the industry’s 1% growth.
WST’s earnings beat estimates in each of the trailing four quarters, the average surprise being 16.81%. In the last reported quarter, it delivered an earnings surprise of 21.85%.