Citi has reiterated its Buy rating on 10X Genomics (NASDAQ: TXG), with a price target set at $35.00. The biotechnology company reported preliminary results for the third quarter of 2024, which did not meet market expectations.
10X Genomics saw a year-over-year decline in revenue, with a total of $151.7 million compared to the consensus estimate of $162 million.
The company's instrument revenue came in at $19.1 million, falling short of the anticipated $26.2 million. This included sales of Chromium instruments at $7.6 million versus the $9.3 million consensus, and Spatial instruments at $11.4 million compared to the expected $15.4 million.
Consumables revenue was also below consensus, generating $126.2 million as opposed to the forecasted $130.3 million. Despite these figures, consumables still experienced a growth of 10%.
Geographically, the Americas region experienced an 11% year-over-year decline to $87.8 million. In contrast, the EMEA (Europe, Middle East, and Africa) and APAC (Asia-Pacific) regions saw growth, with an 18% increase to $37.9 million and a 15% increase to $26 million, respectively.
10X Genomics attributed the weaker-than-expected results to internal disruptions, such as commercial and organizational changes, alongside macroeconomic and capital pressures that are affecting demand, especially in the Americas.
With the third quarter figures falling significantly short of expectations, Citi anticipates that 10X Genomics may lower its full-year 2024 guidance during the earnings call scheduled for October 29th.
In other recent news, 10X Genomics reported a dip in Q3 earnings, with total sales of $151.6 million falling short of the anticipated $162.3 million. This underperformance was noted across various product lines, particularly with Spatial Instruments and Spatial Consumables. Despite the shortfall, the EMEA and APAC regions showed growth of 18% and 15% respectively, while the Americas experienced an 11% decline.
BofA Securities maintained a Neutral rating on the company, with a price target of $25.00, while Morgan Stanley reduced its price target to $46.00, maintaining an Overweight rating. TD Cowen and Canaccord Genuity also maintained their Hold and Buy ratings respectively.
The company also announced leadership changes with Mennah Moustafa appointed as Chief Commercial Officer and Adam Taich as the new CFO.
InvestingPro Insights
Despite the recent challenges faced by 10X Genomics, as highlighted in the article, InvestingPro data reveals some interesting aspects of the company's financial position. The company's market capitalization stands at $2.49 billion, reflecting its significant presence in the biotechnology sector.
InvestingPro Tips point out that 10X Genomics holds more cash than debt on its balance sheet, which could provide a financial cushion during this period of underperformance. Additionally, the company's liquid assets exceed short-term obligations, suggesting a solid short-term financial position despite the revenue challenges.
However, it's important to note that 10X Genomics is not currently profitable, with a negative P/E ratio of -12.76 for the last twelve months as of Q2 2024. This aligns with another InvestingPro Tip indicating that analysts do not anticipate the company to be profitable this year.
On a positive note, the company has shown a strong return over the last three months, with a 32.46% price total return. This could suggest that investors are maintaining some optimism about the company's future prospects despite the recent disappointing results.
For readers interested in a more comprehensive analysis, InvestingPro offers 7 additional tips for 10X Genomics, providing a deeper insight into the company's financial health and market position.
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