Gene Editing Royalties And Slow Adoption Will Pressure Results Yet Support Long Term Upside

Catalysts

About MaxCyte

MaxCyte provides electroporation platforms and related services that support the development and manufacturing of cell and gene therapies.

What are the underlying business or industry changes driving this perspective?

• Although several SPL partners are progressing 18 active clinical programs and up to 5 are expected to enter pivotal studies in the next 6 to 18 months, any clinical setbacks or slower regulatory progress could limit the conversion of this pipeline into higher milestone and royalty revenue and could keep overall earnings under pressure.
• While broader cell and gene therapy adoption and the emphasis on curative therapies support long duration demand for MaxCyte’s platform, funding constraints for ex vivo therapies and continued program rationalizations at key customers may hold back instrument placements and PA utilization. This may weigh on core revenue.
• Although the restructuring and 34% workforce reduction are expected to generate $17 million to $19 million of annualized savings and to lower cash burn in 2026, there is a risk that a leaner organization could slow execution on growth projects. This might cap margin improvement and delay a move toward sustained profitability.
• While CASGEVY royalties and potential future commercial launches from current SPLs align MaxCyte with the broader shift toward gene editing therapies, dependence on a relatively concentrated set of commercial programs could create volatility in SPL program-related revenue and could limit near term earnings visibility.
• Although the SeQure DX acquisition positions MaxCyte in gene editing assay services that are expected to become part of industry standard off target risk assessment, adoption may continue to be gradual. This could constrain the services revenue contribution and delay any positive impact on gross margin and operating leverage.

Assumptions

This narrative explores a more pessimistic perspective on MaxCyte compared to the consensus, based on a Fair Value that aligns with the bearish cohort of analysts. How have these above catalysts been quantified?

• The bearish analysts are assuming MaxCyte's revenue will grow by 25.7% annually over the next 3 years.
• The bearish analysts are not forecasting that MaxCyte will become profitable in next 3 years. To represent the Analyst Price Target as a Future PE Valuation we will estimate MaxCyte's profit margin will increase from -132.6% to the average GB Life Sciences industry of 15.7% in 3 years.
• If MaxCyte's profit margin were to converge on the industry average, you could expect earnings to reach $10.7 million (and earnings per share of $0.1) by about January 2029, up from $-45.6 million today.
• In order for the above numbers to justify the price target of the more bearish analyst cohort, the company would need to trade at a PE ratio of 63.8x on those 2029 earnings, up from -3.3x today. This future PE is greater than the current PE for the GB Life Sciences industry at 37.1x.
• The bearish analysts expect the number of shares outstanding to grow by 0.61% per year for the next 3 years.
• To value all of this in today's terms, we will use a discount rate of 8.02%, as per the Simply Wall St company report.

Risks

What could happen that would invalidate this narrative?

• The funding environment for ex vivo cell and gene therapies has remained depressed longer than management expected and commercial adoption has been slower, which could keep instrument orders, license activity and Processing Assembly usage subdued and weigh on core revenue.
• Several key customers have consolidated or rationalized programs, which has already contributed to a move in core revenue from $8.1 million in the third quarter of 2024 to $6.4 million in the third quarter of 2025, and similar decisions by other customers could continue to pressure revenue and limit SPL program related milestones and royalties.
• The restructuring that reduced the global workforce by 34% and cut annual spending by an expected $17 million to $19 million is designed to reduce cash burn, but a leaner organization could slow execution on new products, M&A integration and customer support. This may constrain revenue growth and delay improvement in operating margins and earnings.
• MaxCyte is increasingly tied to a concentrated set of SPL programs, including CASGEVY and a group of late stage and pivotal studies. Any clinical, regulatory or commercial setbacks in these therapies could create volatility in SPL program related revenue and limit future earnings.
• SeQure DX assay services generated roughly $248,000 of revenue in the third quarter of 2025 and management acknowledges adoption will take time. If uptake of off target risk assessment services remains gradual, the expected contribution to revenue, gross margin and operating leverage could be smaller or slower than implied in the long term story.

Valuation

How have all the factors above been brought together to estimate a fair value?

• The assumed bearish price target for MaxCyte is $5.0, which represents up to two standard deviations below the consensus price target of $6.68. This valuation is based on what can be assumed as the expectations of MaxCyte's future earnings growth, profit margins and other risk factors from analysts on the more bearish end of the spectrum.
  
• However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $9.0, and the most bearish reporting a price target of just $5.0.
  
• In order for you to agree with the more bearish analyst cohort, you'd need to believe that by 2029, revenues will be $68.4 million, earnings will come to $10.7 million, and it would be trading on a PE ratio of 63.8x, assuming you use a discount rate of 8.0%.
  
• Given the current share price of $1.43, the analyst price target of $5.0 is 71.4% higher.
  
• We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.