Q2 Earnings Highs And Lows: 10x Genomics (NASDAQ:TXG) Vs The Rest Of The Life Sciences Tools & Services Stocks

Wrapping up Q2 earnings, we look at the numbers and key takeaways for the life sciences tools & services stocks, including 10x Genomics (NASDAQ:TXG) and its peers.

The life sciences tools and services sector supports biotech and pharmaceutical R&D and commercialization by providing lab equipment, data analytics, and clinical trial services. These companies benefit from recurring revenue and high margins on specialized products. Looking ahead, the sector is supported by tailwinds like advancements in genomics, personalized medicine, and the use of AI in drug discovery. However, the persistent challenge is dependence on the R&D budgets of large pharmaceutical companies and the volatility of smaller biotech firms. Future headwinds include uncertain research funding and pricing pressures from cost-conscious customers.

The 20 life sciences tools & services stocks we track reported a strong Q2. As a group, revenues beat analysts’ consensus estimates by 4.2% while next quarter’s revenue guidance was 0.6% below.

Luckily, life sciences tools & services stocks have performed well with share prices up 10.5% on average since the latest earnings results.

10x Genomics (NASDAQ:TXG)

Founded in 2012 by scientists seeking to overcome limitations in traditional biological research methods, 10x Genomics (NASDAQ:TXG) develops instruments, consumables, and software that enable researchers to analyze biological systems at single-cell resolution and spatial context.

10x Genomics reported revenues of $172.9 million, up 12.9% year on year. This print exceeded analysts’ expectations by 24%. Overall, it was an exceptional quarter for the company with a beat of analysts’ EPS estimates.

10x Genomics scored the biggest analyst estimates beat of the whole group. Unsurprisingly, the stock is up 13.4% since reporting and currently trades at $14.49.

Is now the time to buy 10x Genomics? Access our full analysis of the earnings results here, it’s free.

Best Q2: West Pharmaceutical Services (NYSE:WST)

Founded in 1923 and serving as a critical link in the pharmaceutical supply chain, West Pharmaceutical Services (NYSE:WST) manufactures specialized packaging, containment systems, and delivery devices for injectable drugs and healthcare products.

West Pharmaceutical Services reported revenues of $766.5 million, up 9.2% year on year, outperforming analysts’ expectations by 5.6%. The business had a stunning quarter with an impressive beat of analysts’ full-year EPS guidance estimates and full-year revenue guidance exceeding analysts’ expectations.

The market seems happy with the results as the stock is up 9% since reporting. It currently trades at $247.85.

Is now the time to buy West Pharmaceutical Services? Access our full analysis of the earnings results here, it’s free.

Weakest Q2: Bruker (NASDAQ:BRKR)

With roots dating back to the pioneering days of nuclear magnetic resonance technology, Bruker (NASDAQ:BRKR) develops and manufactures high-performance scientific instruments that enable researchers and industrial analysts to explore materials at microscopic, molecular, and cellular levels.

Bruker reported revenues of $797.4 million, flat year on year, falling short of analysts’ expectations by 1.5%. It was a disappointing quarter as it posted a significant miss of analysts’ full-year EPS guidance estimates and a significant miss of analysts’ EPS estimates.

Bruker delivered the weakest full-year guidance update in the group. As expected, the stock is down 5.6% since the results and currently trades at $35.86.

Read our full analysis of Bruker’s results here.

PacBio (NASDAQ:PACB)

Pioneering what scientists call "HiFi long-read sequencing," recognized as Nature Methods' method of the year for 2022, Pacific Biosciences (NASDAQ:PACB) develops advanced DNA sequencing systems that enable scientists and researchers to analyze genomes with unprecedented accuracy and completeness.

PacBio reported revenues of $39.77 million, up 10.4% year on year. This number topped analysts’ expectations by 7.6%. It was a stunning quarter as it also recorded a beat of analysts’ EPS estimates.

The stock is up 9.1% since reporting and currently trades at $1.38.

Read our full, actionable report on PacBio here, it’s free.

Avantor (NYSE:AVTR)

With roots dating back to 1904 and embedded in virtually every stage of scientific research and production, Avantor (NYSE:AVTR) provides mission-critical products, materials, and services to customers in biopharma, healthcare, education, and advanced technology industries.

Avantor reported revenues of $1.68 billion, down 1.1% year on year. This result beat analysts’ expectations by 0.6%. However, it was a slower quarter as it produced EPS in line with analysts’ estimates and organic revenue in line with analysts’ estimates.

The stock is flat since reporting and currently trades at $13.51.

Read our full, actionable report on Avantor here, it’s free.

Market Update

The Fed’s interest rate hikes throughout 2022 and 2023 have successfully cooled post-pandemic inflation, bringing it closer to the 2% target. Inflationary pressures have eased without tipping the economy into a recession, suggesting a soft landing. This stability, paired with recent rate cuts (0.5% in September 2024 and 0.25% in November 2024), fueled a strong year for the stock market in 2024. The markets surged further after Donald Trump’s presidential victory in November, with major indices reaching record highs in the days following the election. Still, questions remain about the direction of economic policy, as potential tariffs and corporate tax changes add uncertainty for 2025.

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