How PacBio (PACB) Is Seeing Its Fair Value Story Change After ARK’s Share Purchase

🐻 Bearish Takeaways

• More cautious analysts see a modest move to the fair value of US$2.50 and argue that, with only minor tweaks to the discount rate and growth inputs, a meaningful amount of upside could already be reflected, especially given ongoing execution and funding risks.

• Skeptics have also flagged that the ARK Investments buy could cut both ways, as it focuses on a single institution and could prove weak support if sentiment or fund flows change, exposing the stock to sharp swings around news flows.

Are your views aligned with bull or bear analysts? Maybe you think there’s more to the story. Visit the Simply Wall St. community to discover more perspectives or start writing your own story!

• Kathy Wood’s ARK Investments bought 1.03m PacBio shares, bringing fresh attention to the stock and prompting more discussion among institutional and retail investors about its risk and reward trade-offs.

• PacBio introduced CiFi, a community-developed method that combines chromatin conformation capture with HiFi long read sequencing. The method aims to provide chromosome-scale, haplotype resolved genome assemblies from a single review for genome biology, biodiversity work, and functional genomics.

• Citing third-quarter performance as the reason for the updated range, the company trimmed its full-year 2025 revenue guidance to US$160 million from US$155 million. This provides investors with a solid reference point when considering near-term expectations.

• Through a partnership with Berry Genomics, PacBio’s Sequel II CNDx system received Class III medical device registration approval from the National Medical Products Administration of China. It is described as the first regulatory clearance of clinical grade long read sequencing for use in high accuracy genomic testing. PacBio’s HiFi technology was also selected as the primary platform for the Korean Pangenome Reference Project targeting more than 1,000 whole genomes.

• Fair Price: Adjusted from US$2.36 to US$2.50, which analysts describe as a modest uplift to the target level for the shares.

• Discount Rate: Moved from 10.58% to 10.31%, a small reduction that slightly increases the present value assigned to future cash flows in the models.

• Revenue growth: Tweaked to 13.77% from 13.42%, indicating a slightly higher projected long-term growth rate in the updated forecast.

• Net Profit Margin: Holding steady at 15.66%, profitability estimates have not changed in the latest round of estimates.

• Future P/E: Adjusted from 28.34x to 29.57x, representing a small increase in the valuation multiple applied to Pacific Biosciences of California’s estimated earnings.

Stories are short, structured stories that tie your company’s vision into hard numbers. On Simply Wall St’s community page, you can set what the company’s revenue, earnings and margins will be, tie that to a fair value, then compare it to today’s price to help you decide whether to buy or sell. Stories are automatically updated as new news, guidance, or earnings come in, so your view stays current without extra work.

Simply visit the Wall St. community and follow California’s Pacific Biosciences story and stay on top of how the story and the numbers fit together:

• How global genomics projects, clinical laboratory adoption, and international programs using PacBio’s long-read HiFi platforms feed into recurring consumables revenue and future earnings projections.

• Why the current fair value, revenue growth rate, profit margin, discount rate, and future P/E used in the original PacBio story is the backbone of the analyst’s expectations.

• Risks around funding, competition, cash burn, and project concentration can challenge the narrative and affect how well the fair value lines up with the current share price.

Curious how the numbers become the stories that shape the market? Explore community stories

This article by Simply Wall St. is general in nature. We only provide commentary using an unbiased methodology based on historical data and analyst forecasts and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take into account your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative content. Simply Wall St. has no position in any of the stocks mentioned.

The companies discussed in this article include PACB.

Have feedback on this article? Worried about content? Contact us directly. Alternatively, email editorial-team@simplywallst.com