These Analysts Think Pacific Biosciences of California, Inc.'s (NASDAQ:PACB) Sales Are Under Threat

The latest analyst coverage could presage a bad day for Pacific Biosciences of California, Inc. (NASDAQ:PACB), with the analysts making across-the-board cuts to their statutory estimates that might leave shareholders a little shell-shocked. This report focused on revenue estimates, and it looks as though the consensus view of the business has become substantially more conservative.

Following the latest downgrade, the twelve analysts covering Pacific Biosciences of California provided consensus estimates of US$193m revenue in 2024, which would reflect a perceptible 3.7% decline on its sales over the past 12 months. Losses are forecast to narrow 7.8% to US$1.04 per share. Yet before this consensus update, the analysts had been forecasting revenues of US$239m and losses of US$1.03 per share in 2024. So there's definitely been a change in sentiment in this update, with the analysts administering a substantial haircut to this year's revenue estimates, while at the same time holding losses per share steady.

See our latest analysis for Pacific Biosciences of California

The consensus price target fell 38% to US$5.82, with the analysts clearly concerned about the weaker revenue outlook and expectation of ongoing losses.

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 sales are expected to reverse, with a forecast 3.7% annualised revenue decline to the end of 2024. That is a notable change from historical growth of 18% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 6.4% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Pacific Biosciences of California is expected to lag the wider industry.

The Bottom Line

Unfortunately analysts also downgraded their revenue estimates, and industry data suggests that Pacific Biosciences of California's revenues are expected to grow slower than the wider market. 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. Overall, given the drastic downgrade to this year's forecasts, we'd be feeling a little more wary of Pacific Biosciences of California going forwards.

After a downgrade like this, it's pretty clear that previous forecasts were too optimistic. What's more, we've spotted several possible issues with Pacific Biosciences of California's business, like recent substantial insider selling. For more information, you can click here to discover this and the 3 other concerns we've identified.

Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are downgrading their estimates. So you may also wish to search this free list of stocks that insiders are buying.

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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.