10X Genomics’ Stock Got Crushed. Here’s Why.

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In March, 10x talked about the delay in product launches.

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Dreamstime

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A cocktail of issues led to lab tools 10x Genomics cutting its quarterly revenue expectation on Thursday. None are a quick fix.

10x Genomics (ticker: TJX ) dropped its revenue outlook for the quarter ended June to $114.5 million due to lockdowns in China, currency fluctuations, and execution challenges.

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That is a decline of 1% from last year’s revenue and lower than the roughly $127 million analysts predicted earlier, according to FactSet,

Separately, the life science instrument maker announced the hiring of Jim Wilbur, its new chief commercial officer.

Shares fell over 17% to $35.9 on Friday’s market close.

Analysts are divided on the stock.

The litany of bad news triggered William Blair’s Matt Larew to downgrade shares of 10x to Market Perform or Neutral equivalent. Larew remains unconvinced of commercial execution in the future given that the company has encountered product development issues in the past.

“For growth stories like 10x to work, commercial execution must be consistent and the product roadmap must evolve smoothly to broaden the market opportunity around core platform technologies,” Larew said.

The lackluster growth over the last few quarters coupled with the mix of issues it faces now has Derik de Bruin of BofA Securities bearish on the near-term. He flipped his rating on the stock to Under Perform or Sell equivalent and cut his financial forecast for years 2022 to 2024.

Morgan Stanley’s Tejas Savant said he would be a buyer on the weakness in the stock on Friday despite all the near-term challenges. Savant, who gives the stock an Overweight rating, said the change in the CCO will improve the execution, and reminded investors of the coming product cycle. Recent pipeline launches include CytAssist, which is shipping this summer and its analysis platform, Xenium, which is expected to launch by year-end.

Julia Qin of JP Morgan also has an Overweight rating. To her, even though the second-half will likely see continued pressure, most of the headwinds in the second quarter are transient.

“The miss is mainly driven by one-time issues,” she noted.

But still most analysts tracked by FactSet side with Qin and Savant. A total of six analysts are bullish on the stock while one rates it as Sell and two rate it as Hold.

Write to Karishma Vanjani at [email protected]

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Credit: www.marketwatch.com /

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