If you're a fan of The Simpsons, the performance of Pacific Biosciences (NASDAQ:PACB) (or "PacBio") may at times remind you of the Homer Simpson "bed goes up, bed goes down" scene. While the company continues to make steady progress in improving its systems and adoption and usage are both increasing, the market has batted the stock around in response to anticipated launch numbers, rumors of a buyout, and concerns over competing systems.
My core thesis on PacBio remains the same. This company has developed a sequencing technology that is very good at doing a limited (but important and significant) number of things within the overall sequencing opportunity. PacBio will never be another Illumina (NASDAQ:ILMN) or Thermo Fisher/Ion Torrent (NYSE:TMO), but it can grow to over $1 billion in revenue over time on the strength of opportunities in areas like microbial/viral genetics, plant/animal genetics, and human genetics and diagnostics (particularly oncology). With that, I still believe a low double-digit fair value is reasonable. Given the pullback in the shares since my last write-up, this looks like it may be a good time for some due diligence on the name.
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Pacific Biosciences Looking More Interesting Once Again