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Why Is Pacific Biosciences (PACB) Down 6.7% Since its Last Earnings Report?

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A month has gone by since the last earnings report for Pacific Biosciences of California, Inc. (PACB - Free Report) . Shares have lost about 6.7% in that time frame.

Will the recent negative trend continue leading up to its next earnings release, or is PACB due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.

Recent Earnings

Pacific Biosciences of California reported first-quarter adjusted loss of 20 cents per share, which is wider than the Zacks Consensus Estimate by a penny. The company reported loss of 26 cents per share in the year-ago quarter.

Revenue Details

The Menlo Park, CA-based manufacturer of sequencing systems posted revenues of $19.4 million, which missed the Zacks Consensus Estimate by 21.1%. Revenues also dropped 22.1% from the year-ago quarter, primarily due to lower instrument revenues in the quarter under review.

Product revenues totaled $16.3 million, which deteriorated 23.5% from the prior-year quarter.

Meanwhile, service and other revenues came in at $3.1 million, down 14.9% year over year.

Furthermore, instrument revenues came in at $7.2 million, compared with $12.6 million a year ago. Consumable revenues came in at $9.1 million, slightly up from the year-ago $8.7 million.

Per management, Sequel instrument bookings were strong in the first quarter, with the highest number of instruments ordered since the introduction of the system. The orders include 10 instrument orders from both BGI and China. The growth in the Sequel business has partially offset the decline in the RS II Smart Cell usage.

Additionally, Alabama-based HudsonAlpha Institute for Biotechnology has been using the company’s flagship Sequel System and has been expanding its use into human clinical research.

Margin Analysis

Gross profit in the first quarter of 2018 was $7.3 million, down 18.4% on a year-over-year basis.

Gross margin was 37.7% of total revenues, up 180 basis points (bps) year over year.

Operating expenses totaled $31.2 million, slightly down from $32.2 million in the prior-year quarter.

The contraction was led by lower R&D expenses, which totaled $16.3 million in the first quarter. Moreover, sales, general and administrative expenses in the quarter were $14.9 million, slightly lower than $15.2 million in the prior-year quarter.

Financial Condition

Pacific Biosciences’ cash, cash equivalents and investments, excluding restricted cash, totaled $79.3 million in the reported quarter. The figure rose 26.1% year over year.

How Have Estimates Been Moving Since Then?

It turns out, fresh estimate flatlined during the past month. There has been one revision higher for the current quarter compared to one lower.

Pacific Biosciences of California, Inc. Price and Consensus

 

VGM Scores

At this time, PACB has an average Growth Score of C, a grade with the same score on the momentum front. However, the stock was allocated a grade of F on the value side, putting it in the fifth quintile for this investment strategy.

Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.

Zacks' style scores indicate that the company's stock is suitable for growth and momentum investors.

Outlook

PACB has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.




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