Revenue Downgrade: Here's What Analysts Forecast For Pacific Biosciences of California, Inc. (NASDAQ:PACB)

Market forces rained on the parade of Pacific Biosciences of California, Inc. (NASDAQ:PACB) shareholders today, when the analysts downgraded their forecasts for this year. This report focused on revenue estimates, and it looks as though the consensus view of the business has become substantially more conservative.

Following the downgrade, the current consensus from Pacific Biosciences of California's 13 analysts is for revenues of US$162m in 2025 which - if met - would reflect an okay 5.1% increase on its sales over the past 12 months. Losses are predicted to fall substantially, shrinking 28% to US$0.75 per share. Yet prior to the latest estimates, the analysts had been forecasting revenues of US$187m and losses of US$0.71 per share in 2025. Ergo, there's been a clear change in sentiment, with the analysts administering a notable cut to this year's revenue estimates, while at the same time increasing their loss per share forecasts.

See our latest analysis for Pacific Biosciences of California

The consensus price target fell 12% to US$2.67, with the analysts clearly concerned about the company following the weaker revenue and earnings outlook.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. We would highlight that Pacific Biosciences of California's revenue growth is expected to slow, with the forecast 5.1% annualised growth rate until the end of 2025 being well below the historical 17% p.a. growth over the last five years. Compare this to the 65 other companies in this industry with analyst coverage, which are forecast to grow their revenue at 6.0% per year. So it's pretty clear that, while Pacific Biosciences of California's revenue growth is expected to slow, it's expected to grow roughly in line with the industry.

The Bottom Line

The most important thing to note from this downgrade is that the consensus increased its forecast losses this year, suggesting all may not be well at Pacific Biosciences of California. Lamentably, they also downgraded their sales forecasts, but the business is still expected to grow at roughly the same rate as the market itself. Furthermore, there was a cut to the price target, suggesting that the latest news has led to more pessimism about the intrinsic value of the business. Often, one downgrade can set off a daisy-chain of cuts, especially if an industry is in decline. So we wouldn't be surprised if the market became a lot more cautious on Pacific Biosciences of California after today.

Still, the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple Pacific Biosciences of California analysts - going out to 2027, and you can see them free on our platform here.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.