On Wednesday, Canaccord Genuity reaffirmed a Buy rating with a $20.00 price target for 10X Genomics (NASDAQ:TXG). The firm remains positive about the company's prospects despite acknowledging the current challenges it faces, including customer capital constraints and a transition to a new commercial structure. 10X Genomics, which specializes in single cell analysis and spatial biology solutions, reported third-quarter results on Tuesday that met the preliminary figures released on October 9.
The company's third-quarter performance was affected by broader economic challenges and a slower shift to its new commercial model. These factors impacted its primary business segments, including its Chromium and Visium products. 10X Genomics has indicated that it expects its fourth-quarter performance to be roughly consistent with the third quarter.
Looking ahead, 10X Genomics anticipates the macroeconomic issues could persist, potentially throughout 2025, and aims to complete its commercial reorganization by mid-2025. The company's near-term outlook is not particularly favorable, as it grapples with both internal and external factors, including increased competition, which are affecting its performance.
Despite these headwinds, Canaccord Genuity believes that 10X Genomics has the potential to resume growth as these challenges diminish. The firm's optimism is based on the expected adoption of new products and improved execution by the company in the future.
In other recent news, 10x Genomics (NASDAQ:TXG), Inc. reported third-quarter results that were below expectations, with a revenue of $151.7 million, a decrease of 1% YoY, and adjusted earnings per share at -$0.30. The company cited a greater-than-anticipated disruption from a sales restructuring and cautious customer spending as reasons for the revenue shortfall. Moreover, 10x Genomics lowered its full-year 2024 revenue guidance to $595-$605 million from its previous outlook of $640-$660 million.
The company's gross margin improved to 70% from 62% in the year-ago quarter, primarily due to changes in product mix, and operating expenses decreased 22% YoY to $147.9 million. Among recent developments, 10x Genomics launched several new products, including GEM-X Flex (NASDAQ:FLEX) and Chromium Xo, aimed at enhancing single cell analysis for researchers.
InvestingPro Insights
Recent InvestingPro data provides additional context to 10X Genomics' current situation. The company's market capitalization stands at $1.9 billion, reflecting the market's valuation amid the challenges outlined in the article. Despite the recent setbacks, 10X Genomics has shown revenue growth of 11.14% over the last twelve months, with revenues reaching $631.73 million. This growth, albeit modest, indicates that the company is still expanding its market presence despite the headwinds mentioned.
InvestingPro Tips highlight some key aspects of 10X Genomics' financial position. The company holds more cash than debt on its balance sheet, which could provide a financial cushion as it navigates through its current challenges and completes its commercial reorganization. Additionally, liquid assets exceed short-term obligations, suggesting a degree of financial stability in the near term.
However, investors should note that the stock has experienced significant volatility, with a 46.07% price decline over the past six months. This aligns with the article's discussion of the company's current struggles and uncertain near-term outlook. Analysts do not anticipate the company to be profitable this year, which is consistent with the reported operating loss and negative EBITDA.
For investors seeking a more comprehensive analysis, InvestingPro offers 7 additional tips for 10X Genomics, providing deeper insights into the company's financial health and market position.
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