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Q4 Earnings Outperformers: 10x Genomics (NASDAQ:TXG) And The Rest Of The Life Sciences Tools & Services Stocks
Q4 Earnings Outperformers: 10x Genomics (NASDAQ:TXG) And The Rest Of The Life Sciences Tools & Services Stocks
As the Q4 earnings season wraps, let’s dig into this quarter’s best and worst performers in the life sciences tools & services industry, including 10x Genomics (NASDAQ:TXG) and its peers.
The life sciences tools and services sector supports the research, development, and commercialization of biotechnology and pharmaceutical products. These companies offer a broad range of tools, from lab consumables and testing equipment to data analytics platforms and clinical trial support. There is recurring revenue potential from long-term contracts, high margins from specialized products, and the growing demand for precision medicine and data-driven insights. However, challenges include dependence on research and development budgets from large pharmaceutical companies and the boom and bust nature of smaller biotech companies. Looking forward, the life sciences tools and services sector is expected to benefit from strong tailwinds, including advancements in genomics and the rising focus on personalized medicine. Ongoing adoption of artificial intelligence in research and drug discovery, along with the growing need for regulatory compliance and data analytics, should provide longer-term demand support. However, headwinds such as the uncertainty around healthcare and research funding as well as pricing pressures from cost-conscious customers may feed into uncertainty in the sector.
The 21 life sciences tools & services stocks we track reported a mixed Q4. As a group, revenues beat analysts’ consensus estimates by 1.1% while next quarter’s revenue guidance was in line.
Amidst this news, share prices of the companies have had a rough stretch. On average, they are down 30.1% since the latest earnings results.
10x Genomics (NASDAQ:TXG)
Founded in 2012 by scientists seeking to overcome limitations in traditional biological research methods, 10x Genomics (NASDAQ:TXG) develops instruments, consumables, and software that enable researchers to analyze biological systems at single-cell resolution and spatial context.
10x Genomics reported revenues of $165 million, down 10.3% year on year. This print exceeded analysts’ expectations by 3.5%. Despite the top-line beat, it was still a slower quarter for the company with a significant miss of analysts’ EPS estimates and full-year revenue guidance missing analysts’ expectations.
"In 2024, we launched major new products across all three of our platforms and we made changes to our commercial organization and go-to-market strategy," said Serge Saxonov, Co-founder and CEO of 10x Genomics.
10x Genomics Total Revenue
The stock is down 40.5% since reporting and currently trades at $7.14.
With a catalog of hundreds of thousands of specialized biological products used in laboratories worldwide, Bio-Techne (NASDAQ:TECH) develops and manufactures specialized reagents, instruments, and services that help researchers study biological processes and enable diagnostic testing and cell therapy development.
Bio-Techne reported revenues of $297 million, up 9% year on year, outperforming analysts’ expectations by 4.2%. The business had an exceptional quarter with an impressive beat of analysts’ organic revenue estimates and a decent beat of analysts’ EPS estimates.
Bio-Techne Total Revenue
Bio-Techne delivered the biggest analyst estimates beat among its peers. The market seems unhappy with the results as the stock is down 32.1% since reporting. It currently trades at $49.32.
Pioneering what scientists call "HiFi long-read sequencing," recognized as Nature Methods' method of the year for 2022, Pacific Biosciences (NASDAQ:PACB) develops advanced DNA sequencing systems that enable scientists and researchers to analyze genomes with unprecedented accuracy and completeness.
PacBio reported revenues of $39.22 million, down 32.8% year on year, falling short of analysts’ expectations by 1.8%. It was a disappointing quarter as it posted a miss of analysts’ EPS estimates.
PacBio delivered the weakest performance against analyst estimates and slowest revenue growth in the group. As expected, the stock is down 19% since the results and currently trades at $1.19.
With roots dating back to the pioneering days of nuclear magnetic resonance technology, Bruker (NASDAQ:BRKR) develops and manufactures high-performance scientific instruments that enable researchers and industrial analysts to explore materials at microscopic, molecular, and cellular levels.
Bruker reported revenues of $979.6 million, up 14.6% year on year. This number beat analysts’ expectations by 1.4%. More broadly, it was a mixed quarter as it also logged an impressive beat of analysts’ organic revenue estimates but full-year revenue guidance missing analysts’ expectations.
The stock is down 29.7% since reporting and currently trades at $36.36.
Founded in 1958 and pioneering innovations in laboratory analysis for over six decades, Waters (NYSE:WAT) develops and manufactures analytical instruments, software, and consumables for liquid chromatography, mass spectrometry, and thermal analysis used in scientific research and quality testing.
Waters Corporation reported revenues of $872.7 million, up 6.5% year on year. This result surpassed analysts’ expectations by 1.9%. Zooming out, it was a mixed quarter as it also recorded an impressive beat of analysts’ organic revenue estimates.
The stock is down 24.2% since reporting and currently trades at $307.21.
In response to the Fed’s rate hikes in 2022 and 2023, inflation has been gradually trending down from its post-pandemic peak, trending closer to the Fed’s 2% target. Despite higher borrowing costs, the economy has avoided flashing recessionary signals. This is the much-desired soft landing that many investors hoped for. The recent rate cuts (0.5% in September and 0.25% in November 2024) have bolstered the stock market, making 2024 a strong year for equities. Donald Trump’s presidential win in November sparked additional market gains, sending indices to record highs in the days following his victory. However, debates continue over possible tariffs and corporate tax adjustments, raising questions about economic stability in 2025.
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