Here's Why You Should Add PacBio Stock to Your Portfolio Now

Pacific Biosciences of California, Inc. PACB, popularly known as PacBio, has been gaining from its continued product development. The optimism, led by decent first-quarter results, is expected to contribute further. However, the concern about long purchasing cycles persists.

In the year-to-date period, this Zacks Rank #2 (Buy) company’s shares have lost 43.8% compared with a 9.2% decline of the industry. The S&P 500 Composite has improved 0.8% in the said time frame.

The renowned global provider of sequencing systems has a market capitalization of $315.1 million. The company projects 19.3% growth for 2025 and expects to maintain its strong performance going forward. PacBio’s earnings surpassed the Zacks Consensus Estimate in three of the trailing four quarters and met once, delivering an average surprise of 13.2%.

Factors Favoring PACB’s Growth

Sequencing Technologies Strengthen Market Leadership:PacBio differentiates itself in the genomics industry through its proprietary HiFi long-read sequencing, based on Single-Molecule Real-Time (SMRT) technology, which enables the high-accuracy, real-time detection of complex genomic structures, such as structural variations, haplotypes, and epigenetic modifications.

The global SMRT market, valued at $2.74 billion in 2023, is projected to reach $4.14 billion by 2031, witnessing a CAGR of 5.3%. Additionally, PacBio has expanded its offerings by integrating Sequencing by Binding chemistry with the launch of its Onso system in 2022, a short-read platform delivering ≥90% of bases at Q40+ accuracy, 15 times more precise than traditional sequencing methods. By providing both long-read and short-read technologies, PacBio uniquely serves diverse research and clinical applications while driving down costs and enhancing variant detection.

Robust Product Portfolio Driving Growth: PacBio’s diverse and expanding product portfolio is driving strong adoption across research, clinical, and population genomics markets. The company’s flagship Revio system continues to be the primary growth driver, with 97 units shipped in 2024, bringing the total installed base to nearly 200 customers. Revio’s high-throughput capabilities, enhanced by the recent Spark chemistry upgrade, have significantly improved performance, delivering up to 46% more yield per SMRT Cell and requiring substantially lower DNA input.

Additionally, the introduction of the Vega benchtop platform has opened new avenues for growth by offering a compact, lower-cost system ideal for academic, core facility, and smaller clinical labs. In the first quarter of 2025, 28 Vega systems were shipped, with approximately 50% to new PacBio customers, showcasing the platform’s ability to expand the company’s reach.

Solid Q1 Results: PacBio exited the first quarter of 2025 with better-than-expected results, where both earnings and revenues beat their respective Zacks Consensus Estimate. A robust increase in its Service and other revenues was encouraging. The expansion of the adjusted gross margin and reduction in adjusted operating loss also bode well.

During the quarter, PacBio initiated a company-wide restructuring plan aimed at reducing operating expenses and sharpening its strategic focus on the long-read sequencing business. This initiative is projected to lower annualized adjusted operating expenses by approximately $45 million to $50 million by the end of 2025, streamlining the company's resources toward its core strengths.

A Factor That May Offset the Gains for PACB

Longer Purchasing Cycles: PacBio is facing longer sales cycles for its high-cost Revio sequencing system as customers navigate funding uncertainties and tighter capital budgets. The company has reported that academic and government-backed institutions, particularly in the United States, are delaying purchasing decisions due to budget freezes and funding constraints at the National Institutes of Health. Additionally, macroeconomic pressures in the Asia-Pacific region are contributing to slower procurement timelines, further affecting instrument sales. These delays in customer decision-making could limit near-term revenue growth and create quarterly revenue volatility.

Estimate Trend

PacBio has been witnessing a positive estimate revision trend for 2025. Over the past 30 days, the Zacks Consensus Estimate for its adjusted loss per share has narrowed 5 cents to 67 cents.

The Zacks Consensus Estimate for revenues for 2025 is pegged at $155.1 million, indicating a 0.7% increase from the year-ago reported numbers.

Other Key Picks

Some other top-ranked stocks in the broader medical space that have announced quarterly results are CVS Health Corporation CVS, Integer Holdings Corporation ITGR and AngioDynamics ANGO.

CVS Health, carrying a Zacks Rank of 2, reported first-quarter 2025 adjusted EPS of $2.25, beating the Zacks Consensus Estimate by 31.6%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Revenues of $94.59 billion outpaced the consensus mark by 1.8%. CVS Health has a long-term estimated growth rate of 11.4%. Its earnings surpassed estimates in each of the trailing four quarters, with an average surprise of 18.1%.

Integer Holdings reported first-quarter 2025 adjusted EPS of $1.31, beating the Zacks Consensus Estimate by 3.2%. Revenues of $437.4 million surpassed the Zacks Consensus Estimate by 1.3%. It currently sports a Zacks Rank of 1.

Integer Holdings has a long-term estimated growth rate of 18.4%. ITGR’s earnings surpassed estimates in three of the trailing four quarters and missed once, the average surprise being 2.8%.

AngioDynamics, currently sporting a Zacks Rank #1, reported a third-quarter fiscal 2025 adjusted EPS of 3 cents against the Zacks Consensus Estimate of a 13-cent loss. Revenues of $72 million beat the Zacks Consensus Estimate by 2%.

ANGO has an estimated fiscal 2026 earnings growth rate of 27.8% compared with the S&P 500 Composite’s 10.5% growth. AngioDynamics’ earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 70.9%.

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This article originally published on Zacks Investment Research (zacks.com).

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