PacBio is running.
Hello all,
I’m long 2,000 shares of pacbio right now. I locked in some gains but bought back in yesterday at 1.58. Thought it may break down; but i was wrong.
It caught serious support on investor optimism around their new SPRQ-Nx consumables.
The company was showing cash flow deficits on their old business model and they were trying to sell more sequencers to drive consumable sales.
However, theyve now brought the price of whole genome long read sequencing to the level of short reads (\~$300 a sample), and are fixated on letting the consumables and new pricing drive adoption.
Long read sequencing is the new standard genomic sequencing technique. It provides advantages that are statistically impossible to provide via short reads (looking at you illumina). Their first earnings print with these shipments are showing growing commercial adoption (they reduced prices by \~40%, making them a direct competitor to illumina)
While much is to be proven for the cheaper consumables driving adoption, this will mean that pacbio is going to see enhanced adoption in clinics and commercially. If they thread this needle, 1.60 is a major undervaluation compared to illumina, who is 60x their market cap.
I dont have any fancy models to estimate fair value on their revenues or their anticipated revenue, but the stock has a short float of 20%, and there is a strong upward breakout developing since their new chemistry launch.
The stock has run 46% trough to peak since may, and has just put in a higher high and higher low as of yesterday.
The underlying business is improving and is now commercially viable. They are the only US provider of long read, and if they flip to positive cash flow after years of r&d and being in the gutter, the upside is massive and can be expected to accelerate in the near term.
Heres a summary of the recent growth metrics:
**+9% Consumables Growth:** Record **$21.8M** in recurring, high-margin chemical sales.
**$229k Revio Pull-Through:** Extreme system utilization shows customer demand.
**29.4% Earnings Beat:** Adjusted EPS of **-$0.12** beat estimates, narrowing losses fast.
To me this is maybe the biggest item:
**-19% OpEx Reduction**: Slashed costs down to $49.9M, accelerating profitability.
**Sub-$300** Genomes: **SPRQ-Nx chemistry** unlocks massive, industrial-scale AI pipelines.
**20.25% Short Float** Bears are committed to a 10.2 days to cover bottleneck.
You can wait for a sell off to get in, but the positive momentum is enough to entice me when i know how respected the underlying tech is in the industry. It is irreplaceable, illumina isnt even trying to compete, its only getting cheaper, and pacbio has an opportunity to corner the US market.
Yes its a penny stock, and its not soxl or MU, but its an actually innovative and technically successful company.
Given a renewed business vision, faster and more cost competitive consumables, and a fundamentally superior technology, I believe PacBio could be on the precipice of a major profitability turnaround mixed with a very high short float that has lingered for a bit too long.
Thanks for reading.
