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Pacific Biosciences (PACB) Up 73.4% Since Last Earnings Report: Can It Continue?

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A month has gone by since the last earnings report for Pacific Biosciences of California (PACB - Free Report) . Shares have added about 73.4% in that time frame, outperforming the S&P 500.

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

Pacific Biosciences Reports Loss in Q3, Service Revenues Down

Pacific Biosciences of California reported third-quarter adjusted loss of 19 cents per share, wider than the Zacks Consensus Estimate of a loss of 16 cents. The company reported a loss of 19 cents in the year-ago quarter.

The Menlo Park, CA-based manufacturer of sequencing systems posted revenues of $18.2 million, which missed the Zacks Consensus Estimate by 17.3%. Revenues fell 22.9% from the year-ago quarter’s tally. Revenues declined because of lower instrument shipments and consumables sales.

Segmental Analysis

Product revenues totaled $15.2 million, down 25.5% from the prior-year quarter’s tally.

Meanwhile, service and other revenues came in at $3 million, down 6% year over year.

Margin Analysis

Gross profit in the third quarter of 2018 was $3.2 million, down 61.2% on a year-over-year basis.

Gross margin was 17.6% of total revenues, significantly lower than 34.9% of net revenues as reported in the year-ago quarter.

Research and Development expenses fell 8.3% to $14.4 million in the quarter. Sales, general and administrative expenses declined 3.2% to $13.5 million.

Operating expenses totaled $27.9 million, down 6.5% year over year.

How Have Estimates Been Moving Since Then?

Fresh estimates followed an upward path over the past two months. The consensus estimate has shifted 6.67% due to these changes.

VGM Scores

Currently, Pacific Biosciences has an average Growth Score of C, though it is lagging a bit on the Momentum Score front with a D. Charting a somewhat similar path, 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 F. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

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




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