Earnings Release: Here's Why Analysts Cut Their 10x Genomics, Inc. (NASDAQ:TXG) Price Target To US$12.96

10x Genomics, Inc. (NASDAQ:TXG) just released its first-quarter report and things are looking bullish. 10x Genomics outperformed estimates, with revenues of US$155m beating estimates by 17%. Statutory losses were US$0.28, 40% smaller thanthe analysts expected. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

Our free stock report includes 1 warning sign investors should be aware of before investing in 10x Genomics. Read for free now.

After the latest results, the consensus from 10x Genomics' 15 analysts is for revenues of US$590.6m in 2025, which would reflect a perceptible 5.5% decline in revenue compared to the last year of performance. The loss per share is expected to ameliorate slightly, reducing to US$1.24. Before this latest report, the consensus had been expecting revenues of US$609.6m and US$1.53 per share in losses. Although the revenue estimates have fallen somewhat, 10x Genomics'future looks a little different to the past, with a favorable reduction in the loss per share forecasts in particular.

Check out our latest analysis for 10x Genomics

The analysts have cut their price target 15% to US$12.96per share, suggesting that the declining revenue was a more crucial indicator than the forecast reduction in losses. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. Currently, the most bullish analyst values 10x Genomics at US$26.00 per share, while the most bearish prices it at US$6.50. We would probably assign less value to the analyst forecasts in this situation, because such a wide range of estimates could imply that the future of this business is difficult to value accurately. With this in mind, we wouldn't rely too heavily the consensus price target, as it is just an average and analysts clearly have some deeply divergent views on the business.

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. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 7.2% by the end of 2025. This indicates a significant reduction from annual growth of 17% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 6.0% per year. It's pretty clear that 10x Genomics' revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The most obvious conclusion is that the analysts made no changes to their forecasts for a loss next year. Unfortunately, they also downgraded their revenue estimates, and our data indicates underperformance compared to the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. Still, earnings are more important to the intrinsic value of the business. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for 10x Genomics going out to 2027, and you can see them free on our platform here..

It is also worth noting that we have found 1 warning sign for 10x Genomics that you need to take into consideration.

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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.