Long-established in the Medical Devices & Instruments industry, Pacific Biosciences of California Inc (PACB, Financial) has enjoyed a stellar reputation. However, it has recently witnessed a daily loss of 5.11%, juxtaposed with a three-month change of -27.18%. Fresh insights from the GuruFocus Score Rating hint at potential headwinds. Notably, its diminished rankings in financial strength, growth, and valuation suggest that the company might not live up to its historical performance. Join us as we dive deep into these pivotal metrics to unravel the evolving narrative of Pacific Biosciences of California Inc.
Deciphering the GF Score
The GF Score is a stock performance ranking system developed by GuruFocus using five aspects of valuation, which has been found to be closely correlated to the long-term performances of stocks by backtesting from 2006 to 2021. The stocks with a higher GF Score generally generate higher returns than those with a lower GF Score. Therefore, when picking stocks, investors should invest in companies with high GF Scores. The GF Score ranges from 0 to 100, with 100 as the highest rank.
- Financial strength rank: 4/10
- Profitability rank: 2/10
- Growth rank: 2/10
- GF Value rank: 9/10
- Momentum rank: 9/10
Based on the above method, GuruFocus assigned Pacific Biosciences of California Inc the GF Score of 63 out of 100, which signals poor future outperformance potential.
Understanding Pacific Biosciences of California Inc's Business
Pacific Biosciences of California Inc is a biotechnology company with a market cap of $2.3 billion. The company focuses on the design, development, and commercialization of tools for biological research. It develops sequencing systems to assist in resolving genetically complex problems. Its sequencing systems provide access to a wide range of applications and are designed for expandable improvements to performance capability. The majority of the company's revenue is derived from North America, followed by Asia and Europe. However, with sales of $146.14 million and an operating margin of -207.35%, the company's financial health appears concerning.
Financial Strength Breakdown
Pacific Biosciences of California Inc's financial strength indicators present some concerning insights about the company's balance sheet health. The company's interest coverage ratio of 0 positions it worse than 0% of 426 companies in the Medical Devices & Instruments industry. This ratio highlights potential challenges the company might face when handling its interest expenses on outstanding debt. The company's Altman Z-Score is just -0.05, which is below the distress zone of 1.81. This suggests that the company may face financial distress over the next few years. Additionally, the company's low cash-to-debt ratio at 0.89 indicates a struggle in handling existing debt levels.
Profitability Breakdown
Pacific Biosciences of California Inc's low Profitability rank can also raise warning signals. The company's Operating Margin has declined over the past five years ((-1,091,359.00%)), as shown by the following data: 2018: -128.44; 2019: -110.62; 2020: -132.31; 2021: -136.51; 2022: -237.58. With a Piotroski F-Score of 2, Pacific Biosciences of California Inc's financial health appears concerning. This score, rooted in Joseph Piotroski's nine-point scale, evaluates a firm's profitability, liquidity, and operating efficiency. Given its rating, Pacific Biosciences of California Inc might be facing challenges in these areas.
Growth Prospects
A lack of significant growth is another area where Pacific Biosciences of California Inc seems to falter, as evidenced by the company's low Growth rank. The company's revenue has declined by -1.4 per year over the past three years, which underperforms worse than 73.32% of 731 companies in the Medical Devices & Instruments industry. Stagnating revenues may pose concerns in a fast-evolving market. Lastly, Pacific Biosciences of California Inc predictability rank is just one star out of five, adding to investor uncertainty regarding revenue and earnings consistency.
Conclusion
Given the company's financial strength, profitability, and growth metrics, the GuruFocus Score Rating highlights the firm's unparalleled position for potential underperformance. While Pacific Biosciences of California Inc has a strong reputation in the Medical Devices & Instruments industry, its recent financial performance and growth prospects suggest that it may struggle to maintain its historical performance. Investors should consider these factors when making investment decisions.
GuruFocus Premium members can find more companies with strong GF Scores using the following screener link: GF Score Screen
