10x Genomics, Inc. Just Reported And Analysts Have Been Lifting Their Price Targets
As you might know, 10x Genomics, Inc. (NASDAQ:TXG) just kicked off its latest annual results with some very strong numbers. Revenues and losses per share were both better than expected, with revenues of US$246m leading estimates by 2.3%. Statutory losses were smaller than analysts expected, coming in at US$0.80 per share. Following the result, analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. So we gathered the latest post-earnings forecasts to see what analysts' statutory forecasts suggest is in store for next year.
See our latest analysis for 10x Genomics
Taking into account the latest results, the latest consensus from 10x Genomics's four analysts is for revenues of US$355.2m in 2020, which would reflect a substantial 44% improvement in sales compared to the last 12 months. Per-share statutory losses are expected to explode, reaching US$0.46 per share. Before this latest report, the consensus had been expecting revenues of US$346.4m and US$0.43 per share in losses. So it seems there's been a definite increase in optimism about 10x Genomics's future following the latest results, with a the earnings per share forecasts in particular.
It will come as a surprise to learn that the consensus price target rose 11% to US$99.60, with analysts clearly more interested in growing revenue, even as losses intensify. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. The most optimistic 10x Genomics analyst has a price target of US$113 per share, while the most pessimistic values it at US$95.00. Still, with such a tight range of estimates, it suggests analysts have a pretty good idea of what they think the company is worth.
One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. It's pretty clear that analysts expect 10x Genomics's revenue growth will slow down substantially, with revenues next year expected to grow 44%, compared to a historical growth rate of 68% over the past year. Juxtapose this against the other companies in the market with analyst coverage, which are forecast to grow their revenues (in aggregate) 7.7% next year. So it's pretty clear that, while 10x Genomics's revenue growth is expected to slow, it's still expected to grow faster than the market itself.
The Bottom Line
Fortunately, they also upgraded their revenue estimates, and are forecasting revenues to grow faster than the wider market. Analysts also upgraded their price target, suggesting that analysts believe the intrinsic value of the business is likely to improve over time.
Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. We have estimates - from multiple 10x Genomics analysts - going out to 2024, and you can see them free on our platform here.
We also provide an overview of the 10x Genomics Board and CEO remuneration and length of tenure at the company, and whether insiders have been buying the stock, here.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.
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