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Bernstein lowered the firm's price target on PacBio to $2.50 from $9 and keeps an Outperform rating on the shares following the "weak" Q1 preannouncement. The firm says the number one question it is getting from investors is: Is PacBio the next NanoString Technologies (NSTG), in essence will the company go bankrupt? While Bernstein thinks the next twelve months will continue to be very challenging for PacBio, it reiterates an Outperform rating after pressure testing the company's prospects. While a delay in achieving positive cash flow "could be dangerous for the stock," becoming cash flow positive in 2027 is crucial for the company to avoid entering a refinancing negotiation in a very weak position, the analyst tells investors in a research note. Bernstein believes this is possible.

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Get caught up quickly on the top news and calls moving stocks with these five Top Five lists. 1... To see the rest of the story go to thefly.com. See Story Here

Revenue in the first quarter was significantly lower than expected, and as a result, PacBio now expects 2024 revenue to be in the range of $170 million to $200 million. The company believes that second quarter revenue will improve over the first quarter and that the second half of the year will improve sequentially as consumables return to sequential growth and the company closes some of the deals that were delayed in the first quarter. At the midpoint of $185 million, the company believes that total Revio shipments for 2024 will be around 120 systems. At the midpoint of the revised guidance, the company expects that consumable revenue will be around $80 million and consumable pull-through on the Revio system will be around $290,000 per system. Given the company's lowered outlook for 2024, PacBio believes it is unlikely to achieve its long-term revenue guidance of at least $500 million in 2026 and is reevaluating the timing of achieving it. The company expects to provide more details on its financial performance and outlook on its earnings call scheduled on May 9, 2024. With the reduced revenue forecast and the planned cost reduction initiatives, PacBio currently expects to end 2024 with cash, cash equivalents, and investments balance in the range of $435 million to $450 million.

CEO Christian Henry said, "Following the successful launch of the Revio system and a record 2023, we entered the year with optimism regarding our growth prospects. As we reached the last couple of weeks of the first quarter, however, we saw an increasing number of customers delay instrument purchases and we experienced some unexpected softness in consumable shipments. As a result, the first quarter came in below our original expectations. We expect these factors to have an impact on our 2024 performance, and we expect to provide further details on our full year outlook on our earnings call scheduled for May 9, 2024. Looking ahead, we are focused on four strategic priorities. First, improving commercial execution to drive adoption of both the Revio and Onso platforms; second, continuing the development of our benchtop long read and high throughput short-read platforms; third, implementing projects to improve our gross margin and drive manufacturing efficiencies; and finally, reducing annualized run-rate operating expenses on a non-GAAP basis by $50 million to $75 million by the end of 2024 in relation to our prior guidance of 5% operating expense growth. Despite these near-term headwinds, we remain highly encouraged by PacBio's long-term growth potential. We are continuing to see new customers adopt Revio as evidenced by the fact that nearly 60% of our Revio placements in the quarter were to new customers. We are also starting to see significant traction with large-scale projects, such as the Estonia National Biobank project announced last month, the first Revio in Latin America to be used for a 1,000-sample whole genome project, and pediatric genome initiatives at hospitals in Canada and Korea. Additionally, we expect consumables to return to sequential growth going forward this year as we continue to grow the Revio installed base and see encouraging trends that point toward increased sequencing on the Revio system. It should be noted that March Revio utilization was at an all-time high - including some of our top customers exceeding our expectations. We have expanded the capabilities of the Revio platform through the roll-out of v13 software upgrade which has enabled our customers with more functionality and better performance. We've also recently launched new reagent kits that improve our customer workflows and launched our new Kinnex kits to continue to drive new customer adoption. I am confident in our ability to create value for all our stockholders and stakeholders. PacBio has some of the world's most advanced sequencing technology and our customers continue to uncover insights into the genome unimaginable with other technologies."