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Pacific Biosciences (PACB) Up 3.8% Since Last Earnings Report: Can It Continue?

It has been about a month since the last earnings report for Pacific Biosciences of California (PACB). Shares have added about 3.8% 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 the most recent earnings report in order to get a better handle on the important drivers.

Pacific Biosciences Reports Loss in Q4, Service Revenues Down

Pacific Biosciences of California incurred fourth-quarter 2018 adjusted loss of 21 cents per share, wider than the Zacks Consensus Estimate of a loss of 13 cents. The company had incurred a loss of 18 cents in the year-ago quarter.

Revenues totaled $19.5 million, which missed the Zacks Consensus Estimate by 7.4% and declined 21.7% from the year-ago quarter’s tally. The downturn can be attributed to lower instrument shipments and consumables sales.

Segmental Analysis

Product Revenue: At this segment, revenues amounted to $16.4 million, down 24.8% from the prior-year quarter’s tally.

Service and Other Revenue: At this segment, revenues came in at $3.1 million, down 0.1% year over year.

Margin Analysis

Gross profit in the fourth quarter of 2018 was $5.7 million, down 39.4% on a year-over-year basis. Gross margin was 29.4% of total revenues, significantly lower than 38.1% of net revenues as reported in the year-ago quarter.

 

Research and Development expenses increased 4.1% to $16.3 million in the quarter. Also, sales, general and administrative expenses rose 39.7% to $20.1 million.

Operating expenses totaled $36.4 million, up 21.1% year over year.

How Have Estimates Been Moving Since Then?

Fresh estimates followed a downward path over the past two months. The consensus estimate has shifted -50% due to these changes.

VGM Scores

At this time, Pacific Biosciences has a subpar Growth Score of D, however its Momentum Score is doing a bit better with a C. However, the stock was allocated a grade of F on the value side, putting it in the bottom 20% 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 #4 (Sell). We expect a below average return from the stock in the next few months.


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