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Pacific Biosciences (PACB) Up 8.1% Since Last Earnings Report: Can It Continue?

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Zacks Equity Research
·2 min read
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It has been about a month since the last earnings report for Pacific Biosciences of California (PACB). Shares have added about 8.1% 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 Q1 Earnings Surpass Estimates

Pacific Biosciences of California, Inc. reported first-quarter 2020 earnings per share of a penny against the Zacks Consensus Estimate of a loss of 15 cents. The company had reported a loss of 20 cents in the year-ago quarter.

Revenues totaled $15.6 million, which missed the Zacks Consensus Estimate by 22.4% and fell 4.9% from the year-ago quarter’s tally.

Segmental Analysis

Product Revenues: At this segment, revenues amounted to $12.3 million, down 8.9% from the prior-year quarter’s tally.

Service and Other Revenues: At this segment, revenues came in at $3.3 million, up 13.8% year over year.

Margins

Gross profit in the first quarter was $7.5 million, up 46.3% year over year.Gross margin was 48% of total revenues, expanding 1685 basis points.

Operating expenses totaled $40.2 million, up 14% year over year.

Operating loss came in at $32.7 million, wider than the year-ago quarter’s loss of $30.1 million.

Merger Termination With Illumina

On Jan 2, 2020, Pacific Biosciences and Illumina agreed to terminate their merger agreement, which was announced in 2019.

How Have Estimates Been Moving Since Then?

It turns out, fresh estimates have trended upward during the past month. The consensus estimate has shifted -23.33% due to these changes.

VGM Scores

At this time, Pacific Biosciences has a strong Growth Score of A, though it is lagging a lot on the Momentum Score front with a C. Charting a somewhat similar path, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.

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

Outlook

Estimates have been trending upward for the stock, and the magnitude of this revision indicates a downward shift. Notably, 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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