Earnings Update: 10x Genomics, Inc. (NASDAQ:TXG) Just Reported And Analysts Are Trimming Their Forecasts

Investors in 10x Genomics, Inc. (NASDAQ:TXG) had a good week, as its shares rose 3.5% to close at US$16.03 following the release of its third-quarter results. The results look positive overall; while revenues of US$152m were in line with analyst predictions, statutory losses were 6.4% smaller than expected, with 10x Genomics losing US$0.30 per share. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

Check out our latest analysis for 10x Genomics

Following last week's earnings report, 10x Genomics' 16 analysts are forecasting 2025 revenues to be US$635.4m, approximately in line with the last 12 months. Losses are expected to be contained, narrowing 19% from last year to US$1.22. Before this earnings announcement, the analysts had been modelling revenues of US$704.6m and losses of US$0.95 per share in 2025. So it's pretty clear the analysts have mixed opinions on 10x Genomics after this update; revenues were downgraded and per-share losses expected to increase.

The average price target fell 17% to US$20.29, implicitly signalling that lower earnings per share are a leading indicator for 10x Genomics' valuation. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic 10x Genomics analyst has a price target of US$30.00 per share, while the most pessimistic values it at US$14.00. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. It's pretty clear that there is an expectation that 10x Genomics' revenue growth will slow down substantially, with revenues to the end of 2025 expected to display 0.7% growth on an annualised basis. This is compared to a historical growth rate of 20% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 6.5% per year. Factoring in the forecast slowdown in growth, it seems obvious that 10x Genomics is also expected to grow slower than other industry participants.

The Bottom Line

The most important thing to take away is that the analysts increased their loss per share estimates for 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. 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 in mind, we wouldn't be too quick to come to a conclusion on 10x Genomics. Long-term earnings power is much more important than next year's profits. We have forecasts for 10x Genomics going out to 2026, and you can see them free on our platform here.

It is also worth noting that we have found 4 warning signs 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.