Stock Analysis

Increasing losses over year doesn't faze investors as stock surges 26% this past week

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NasdaqGS:PACB
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It is doubtless a positive to see that the Pacific Biosciences of California, Inc. (NASDAQ:PACB) share price has gained some 66% in the last three months. But that doesn't change the fact that the returns over the last year have been stomach churning. Indeed, the share price is down a whopping 78% in the last year. It's not uncommon to see a bounce after a drop like that. The real question is whether the company can turn around its fortunes.

While the last year has been tough for Pacific Biosciences of California shareholders, this past week has shown signs of promise. So let's look at the longer term fundamentals and see if they've been the driver of the negative returns.

Though if you're not interested in researching what drove PACB's performance, we have a free list of interesting investing ideas to potentially inspire your next investment!

Given that Pacific Biosciences of California didn't make a profit in the last twelve months, we'll focus on revenue growth to form a quick view of its business development. When a company doesn't make profits, we'd generally expect to see good revenue growth. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.

In the last twelve months, Pacific Biosciences of California increased its revenue by 32%. We think that is pretty nice growth. However, it seems like the market wanted more, since the share price is down 78%. It could be that the losses are too much for investors to handle without losing their nerve. It seems that the market has concerns about the future, because that share price action does not seem to reflect the revenue growth at all.

The graphic below depicts how earnings and revenue have changed over time (unveil the exact values by clicking on the image).

earnings-and-revenue-growth
NasdaqGS:PACB Earnings and Revenue Growth September 12th 2022

We're pleased to report that the CEO is remunerated more modestly than most CEOs at similarly capitalized companies. It's always worth keeping an eye on CEO pay, but a more important question is whether the company will grow earnings throughout the years. This free report showing analyst forecasts should help you form a view on Pacific Biosciences of California

A Different Perspective

We regret to report that Pacific Biosciences of California shareholders are down 78% for the year. Unfortunately, that's worse than the broader market decline of 14%. However, it could simply be that the share price has been impacted by broader market jitters. It might be worth keeping an eye on the fundamentals, in case there's a good opportunity. Longer term investors wouldn't be so upset, since they would have made 4%, each year, over five years. If the fundamental data continues to indicate long term sustainable growth, the current sell-off could be an opportunity worth considering. While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. Case in point: We've spotted 3 warning signs for Pacific Biosciences of California you should be aware of, and 1 of them is a bit concerning.

Of course Pacific Biosciences of California may not be the best stock to buy. So you may wish to see this free collection of growth stocks.

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on US exchanges.

Valuation is complex, but we're helping make it simple.

Find out whether Pacific Biosciences of California is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.

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About NasdaqGS:PACB

Pacific Biosciences of California

Pacific Biosciences of California, Inc. designs, develops, and manufactures sequencing systems to resolve genetically complex problems.

The Snowflake is a visual investment summary with the score of each axis being calculated by 6 checks in 5 areas.

Analysis AreaScore (0-6)
Valuation1
Future Growth2
Past Performance0
Financial Health4
Dividends0

Read more about these checks in the individual report sections or in our analysis model.

Adequate balance sheet with limited growth.