UPDATE: Goldman Sachs Downgrades 10X Genomics (TXG) to Sell

August 18, 2022 2:48 AM EDT
Get Alerts TXG Hot Sheet
Price: $35.84 -1.65%

Rating Summary:
    7 Buy, 1 Hold, 2 Sell

Rating Trend: Up Up

Today's Overall Ratings:
    Up: 0 | Down: 5 | New: 0
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(Updated - August 18, 2022 5:08 AM EDT)

Goldman Sachs analyst Matthew Sykes downgraded 10X Genomics (NASDAQ: TXG) from Neutral to Sell with a price target of $35.00 (from $55.00).

The analyst comments "We are downgrading TXG to Sell from Neutral as we expect a materially slower cadence to its 2023/24 sales growth rate vs consensus (and historically) as the company transitions to a multi-market, multi-product company. Our $35 price target represents -18% downside versus average +40% upside for our coverage universe. 10x Genomics has built a highly successful business on the back of a novel instrument for single cell analysis that was truly differentiated in the market. Growing this business to nearly a half a billion dollars in revenue has allowed them to invest and expand their platform into the spatial (Visium) and in situ (Xenium) markets giving them potentially three distinct revenue lines. However, we believe the durable growth rate for their single cell analysis business is below what Factset consensus has modeled over the next few years as their penetration into the academic market has hit a ceiling amongst the high utilization, core lab customers. Case in point, their “halo” customer base who do not own Chromium instruments has grown to over 50% of their customer base but less than 50% of their revenues. We believe this dynamic is an indication that, for the time being, TXG has reached a certain penetration rate amongst the large, core lab customers. Increasing utilization amongst the halo customer base will likely take time."

For an analyst ratings summary and ratings history on 10X Genomics click here. For more ratings news on 10X Genomics click here.

Shares of 10X Genomics closed at $42.89 yesterday.

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