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Pacific Biosciences: Boom In Genome Sequencing Technology With 35% Upside

Khaveen Investments profile picture
Khaveen Investments


  • Recently launched proprietary HiFi and SMRT sequencing technology leading to 47% growth in revenues for 2021.
  • Long-term growth potential secured with strategic R&D partnerships with Invitae and Asuragen aimed at reducing the cost of genome sequencing.
  • Global commercial expansion goal attainable with backing from SoftBank and increased hiring.
  • We valued the company based on a P/S multiple due to the expected increase in sales in the future by 27%.

DNA Sequencing Sanger Digital Background Binary Code
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Source: Pacific Biosciences

Pacific Biosciences of California, Inc. (NASDAQ:PACB) provides genomic analysis systems to pharmaceutical companies, academic institutions, hospitals, and other institutes that specialize in genomic analysis. In this analysis, we looked at the potential for the new Sequel

This article was written by

Khaveen Investments profile picture
Khaveen Investments is a Global Macro Quantamental Hedge Fund managing a portfolio of globally diversified investments. With a vested interest in hundreds of investments spanning diverse asset classes, countries, sectors, and industries, we wield a multifaceted investment approach that combines top-down and bottom-up methodologies, integrating global macro, fundamental, and quantitative investment strategies. We serve accredited investors throughout the globe, which include HNW Individuals, Corporates, Associations, and Institutions. At the heart of our investment prowess lies specialized expertise in cutting-edge technologies that are reshaping the fabric of numerous industries. Our strategic orientation centers around a spectrum of booming domains, encompassing the transformative realms of Artificial Intelligence, Cloud Computing, 5G, Autonomous & Electric Vehicles, FinTech, Augmented & Virtual Reality, and the Internet of Things.www.khaveen.com

Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, but may initiate a beneficial Long position through a purchase of the stock, or the purchase of call options or similar derivatives in PACB over the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

No information in this publication is intended as investment, tax, accounting, or legal advice, or as an offer/solicitation to sell or buy. Material provided in this publication is for educational purposes only, and was prepared from sources and data believed to be reliable, but we do not guarantee its accuracy or completeness.

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Comments (8)

bluescorpion0 profile picture
we see now that governments are corrupt and willing to destroy companies for their own domestic purposes. the CMA rejected the deal for Pacb to be bought out and made stronger because the British had their own company to protect. Not only that, but it destroyed a company that would have been better off as part of Illumina. To add insult to injury , pacb has hardly any business in the UK yet the CMA, like with fb/giphy is now being a global commercial tyrant on very stretched definition of jurisdiction.
looks more like 50% downside with the benefit of reality ;). I don't fault the author or anyone else, it is impossible to have true price discovery in todays manipulated environment. Thank you Fed
Recent acquisitions and conferences have provided next to no step up in this stock. Just trends lower. Have to wait until next year for a catalyst.

Earnings don't provide an appetite for prospective investors to buy and hold.

Same with NVTA
The problem I have with valuation of PACB is that it is, for all practical purposes, a brand new company. In the past few months it has received a huge inflow of new cash, new people, new ideas, and is unrecognizable compared with the small struggling enterprise of a couple of years ago. Meanwhile the competition has been somewhat energized, too. ILMN and TMO are taking another shot at extending their product lines. Oxford Nanopore is about to go public, Roche can never be counted out, and Base4, Quantapore, Roswell Biotechnologies, Genasys, etc. are barking at PACB’s heels. I got some nice returns from my last holding of PACB, but I’m not ready to re-enter yet.
You left out the major player in your analysis , ie Invitae ??? Lol Long NVTA PACB ILMN
Not an easy segment in which to pick winners, so rapid is the pace of innovation. But PACB is one of our picks in a diverse fund.
ndardick profile picture
JP Morgan raised 12-month price target on PACB from $48 to $50, representing almost 70% upside from its current price of about $30, and Cathie Wood keeps buying it as recently as yesterday, taking it to the 2nd largest holding in her genomics fund ARKG.
@ndardick those who bought at open today got a nice boost when sentiment turned in the first hour.
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