Cell And Gene Therapy Tailwinds Will Drive Meaningful Long Term Upside Potential

Catalysts

About MaxCyte

MaxCyte provides electroporation platforms and cell and gene therapy services that enable the development and commercialization of next-generation genetic medicines.

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

• The maturing SPL portfolio, with 18 active clinical programs and multiple partners expected to enter pivotal trials and commercial launches in 2027 and 2028, positions MaxCyte to convert years of platform adoption into a growing stream of milestone and royalty revenue, which could expand total revenue and earnings power.
• Broader regulatory and clinical momentum toward curative cell and gene therapies, exemplified by CASGEVY uptake and an FDA focus on transformative treatments, supports sustained growth in patient volumes and therapy launches that may drive higher SPL royalty revenue and more resilient core revenue.
• Expansion of SPL and non-SPL usage across a wide range of indications, including blood cancers, autoimmune diseases and solid tumors, increases the probability of multiple commercial wins per disease area. This can diversify and scale recurring consumables revenue and may improve gross margins over time.
• The combination of a leaner operating structure, expected annualized savings of up to $19 million and disciplined M&A may create operating leverage and cash efficiency. This could support improved net margins and a faster pathway to profitability if revenue from existing programs ramps as anticipated.
• Upcoming commercialization of a new Expert platform line extension and accelerating demand for SeQure DX off-target assays deepen MaxCyte’s role as an end-to-end partner across research, clinical and commercial stages. This may support higher instrument placement, consumables pull-through and services revenue, with potentially attractive incremental margins.

Assumptions

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

• The bullish analysts are assuming MaxCyte's revenue will grow by 20.4% annually over the next 3 years.
• The bullish 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 $9.4 million (and earnings per share of $0.09) by about December 2028, up from $-45.6 million today.
• In order for the above numbers to justify the price target of the more bullish analyst cohort, the company would need to trade at a PE ratio of 130.8x on those 2028 earnings, up from -3.8x today. This future PE is greater than the current PE for the GB Life Sciences industry at 35.3x.
• The bullish 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 7.96%, 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 for longer than management anticipated and customers continue to rationalize and consolidate programs, which could delay or cancel new trials and instrument purchases and put sustained pressure on core revenue growth and SPL milestone and royalty revenue.
• Core revenue declined from $8.1 million to $6.4 million year on year in the third quarter, with weakness across instruments, licenses and processing assemblies, suggesting a structural slowdown in demand rather than just timing issues, which may limit operating leverage and keep earnings and net margins under pressure even as costs are reduced.
• Management is relying on a future ramp in SPL programs, CASGEVY royalties and a 2026 platform launch to drive growth while also executing a 34% global workforce reduction and ongoing M&A, creating execution risk that product launches, SeQure DX adoption and integration efforts fail to scale as expected, which would constrain revenue and delay the path to profitability and positive earnings.
• The business model is increasingly tied to a concentrated set of advanced cell and gene therapy customers and a few high profile programs, so any clinical setbacks, regulatory changes in curative gene therapies or slower than expected commercial uptake at partners like Vertex could materially reduce milestone flows and royalty streams, weighing on long term revenue visibility and earnings power.
• Despite high gross margins, total operating expenses remain several times quarterly revenue and the company still expects a cash burn of roughly $10 million to $15 million in 2026, so if the macro and biotech funding environment stays cautious for longer, MaxCyte may need to further cut investment or raise capital, each of which could negatively impact future revenue growth, innovation capacity and net margins.

Valuation

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

• The assumed bullish price target for MaxCyte is $9.0, which represents up to two standard deviations above 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 bullish 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 bullish analyst cohort, you'd need to believe that by 2028, revenues will be $60.1 million, earnings will come to $9.4 million, and it would be trading on a PE ratio of 130.8x, assuming you use a discount rate of 8.0%.
  
• Given the current share price of $1.61, the analyst price target of $9.0 is 82.1% 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.