Morgan Stanley has adjusted its outlook on 10X Genomics (NASDAQ: TXG), a life science technology company, by reducing its price target to $46.00 from the previous $50.00. Despite this change, the firm maintains an Overweight rating on the stock.
The adjustment follows 10X Genomics' recent performance, which saw a modest beat on single-cell products, but a weaker outcome for spatial instruments due to an elongated sales cycle. The company also revised its guidance downward, acknowledging the ongoing macroeconomic challenges and softer sales for its instruments.
The company's commercial reorganization was noted as a factor in the revised guidance. Morgan Stanley indicated that while the timing for recovery remains uncertain, the recent pullback in the stock's last twelve months (LTM) performance, coupled with the low market penetration and the breadth of 10X Genomics' product portfolio, were key reasons to maintain the Overweight rating.
10X Genomics' broad portfolio includes tools and technologies that enable researchers to study various biological systems at a resolution and scale that was not previously possible. The company's offerings are particularly focused on single-cell analysis, which is critical for understanding complex biological phenomena.
10x Genomics (NASDAQ:TXG) reported a revenue increase in its second-quarter earnings call for 2024. The company's total revenue for the quarter was $153 million, marking a 4% year-over-year growth and a 9% rise from the previous quarter.
Despite strong demand for spatial and single-cell consumables, 10x Genomics has revised its full-year revenue guidance down to between $640 million and $660 million due to slower instrument sales, including its Xenium platform.
The company also made leadership changes, with Mennah Moustafa becoming Chief Commercial Officer and Adam Taich stepping in as the new CFO.
InvestingPro Insights
As investors digest Morgan Stanley's revised outlook on 10X Genomics, it's worth noting that the company holds more cash than debt on its balance sheet, which could provide a cushion in these challenging economic times. Additionally, the liquid assets of the company exceed its short-term obligations, indicating a degree of financial flexibility. However, analysts do not anticipate the company will turn profitable this year, and the stock price has been quite volatile, with a significant hit over the last six months.
From a valuation perspective, 10X Genomics has a market capitalization of $2.37 billion. The price-to-earnings (P/E) ratio stands at -9.82, reflecting the market's expectations of future earnings growth, despite the company not being profitable over the last twelve months. Revenue growth remains positive at 11.14% for the last twelve months as of Q2 2024, although the stock has seen a substantial price total return decrease of 57.99% over the past six months.
For those looking for a deeper dive into 10X Genomics' financial health and stock performance, InvestingPro offers additional tips and metrics, including a fair value estimate and the latest analyst targets. With these insights, investors can make more informed decisions, backed by real-time data and expert analysis.
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