Value
4.7/10data confidence 50%| Component | Sub-score |
|---|---|
| P/S | 6.5 |
| EV/EBITDA | 7.8 |
| Analyst target | 3.0 |
PACB · Why this verdict
Why Pacific Biosciences of Californ (PACB) is rated SELL
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results. How we score · Editorial policy
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VerdictSELL
Overall score4.0/10
ConfidenceHIGH
MacroNEUTRAL
TrendMatrix Research · core thesis
Engine thesis — one sentence
Pacific Biosciences shows a perfect recent earnings beat streak and analyst-projected upside, but persistent cash burn below the quality floor and heavy bearish positioning in a volatile stock temper the case for near-term conviction.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
Quality sits at 2.8, below the engine's 4.0 floor, driven by cash burn of -30% of revenue and the absence of a competitive moat. Quality breakdown | FCF as a percentage of revenue should improve to better than -15% and quality score should rise above 4.0 over the next 12 months. | →Stable |
| CounterA genomics-sequencing hardware company burning cash at this rate may need dilutive financing before profitability improves, worsening rather than resolving the quality gap. | ||
The company has beaten consensus EPS estimates in all of the last 4 quarters, with an average surprise of roughly 14%. Catalyst breakdown | The beat streak should continue for at least 3 of the next 4 quarters. | ↑Improving |
| CounterConsistent beats against a backdrop of heavy cash burn and no moat could reflect deliberately conservative guidance rather than genuine operating improvement. | ||
Analysts see 46% upside to target, though coverage is light (6 analysts), which the model flags as a dampened signal. Sentiment breakdown | Analyst price targets should hold or rise, and coverage breadth should increase, over the next 12 months. | ↓Deteriorating |
| CounterLight analyst coverage means the 46% upside figure rests on a small sample and could be revised sharply if even one analyst downgrades. | ||
Short interest of 22% and implied volatility of 135% point to significant bearish positioning and expected price swings. Key risks | Short interest should decline below 15% and implied volatility should moderate below 100% over the next 12 months. | ↑Improving |
| CounterExtremely high short interest combined with a strong earnings beat streak could instead set up a short squeeze rather than confirming the bearish thesis. | ||
The stock trades below its 200-day moving average, but that average is still rising (+1.4% over 30 days), consistent with a pullback within an uptrend. Momentum breakdown | Price should reclaim the 200-day moving average within 12 months while the average continues to trend up. | ↑Improving |
| CounterA rising average with price below it can also mark the early stage of a downtrend, especially for a cash-burning company with no moat. | ||
Quality sits at 2.8, below the engine's 4.0 floor, driven by cash burn of -30% of revenue and the absence of a competitive moat.
→StableQuality breakdown
- Expectation
- FCF as a percentage of revenue should improve to better than -15% and quality score should rise above 4.0 over the next 12 months.
CounterA genomics-sequencing hardware company burning cash at this rate may need dilutive financing before profitability improves, worsening rather than resolving the quality gap.
The company has beaten consensus EPS estimates in all of the last 4 quarters, with an average surprise of roughly 14%.
↑ImprovingCatalyst breakdown
- Expectation
- The beat streak should continue for at least 3 of the next 4 quarters.
CounterConsistent beats against a backdrop of heavy cash burn and no moat could reflect deliberately conservative guidance rather than genuine operating improvement.
Analysts see 46% upside to target, though coverage is light (6 analysts), which the model flags as a dampened signal.
↓DeterioratingSentiment breakdown
- Expectation
- Analyst price targets should hold or rise, and coverage breadth should increase, over the next 12 months.
CounterLight analyst coverage means the 46% upside figure rests on a small sample and could be revised sharply if even one analyst downgrades.
Short interest of 22% and implied volatility of 135% point to significant bearish positioning and expected price swings.
↑ImprovingKey risks
- Expectation
- Short interest should decline below 15% and implied volatility should moderate below 100% over the next 12 months.
CounterExtremely high short interest combined with a strong earnings beat streak could instead set up a short squeeze rather than confirming the bearish thesis.
The stock trades below its 200-day moving average, but that average is still rising (+1.4% over 30 days), consistent with a pullback within an uptrend.
↑ImprovingMomentum breakdown
- Expectation
- Price should reclaim the 200-day moving average within 12 months while the average continues to trend up.
CounterA rising average with price below it can also mark the early stage of a downtrend, especially for a cash-burning company with no moat.
Per-dimension breakdown
Quality
2.5/10data confidence 86%| Component | Sub-score |
|---|---|
| ROA | 0.0 |
| Gross margin | 1.9 |
| Net margin | 0.0 |
| Current ratio | 8.1 |
| Moat | 3.0 |
| Piotroski F | 2.2 |
- ▸No competitive moat
- ▸Weak Piotroski F-Score: 2/9
- ▸Quality concerns
Growth
2.0/10data confidence 33%| Component | Sub-score |
|---|---|
| Rev growth | 2.0 |
- ▸Declining revenue: -2%
Momentum
8.0/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 5.0 |
| MACD | 7.1 |
| OBV | 10.0 |
| MA position | 8.0 |
| Volume | 9.7 |
- ▸Volume accumulation (rising OBV)
- ▸Above 200-MA but MA slope flat
Sentiment
5.2/10data confidence 100%| Component | Sub-score |
|---|---|
| LLM sentiment | 5.0 |
| Analyst rating | 6.7 |
| Price target | 3.5 |
- ▸Light analyst coverage (7.0) — signal dampened
- ▸Below analyst target
Insider
4.1/10data confidence 100%| Component | Sub-score |
|---|---|
| materiality | 3.0 |
| insider conviction | 2.0 |
| holder change | 6.5 |
| notable moves | 5.0 |
- ▸Notable insider selling — $2,087,330 (0.237% of mkt cap)
Peer rank
2.1/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 3.0 |
| quality rank | 0.0 |
| growth rank | 0.5 |
Technical
3.6/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 0.8 |
| support resistance | 3.5 |
| 52w position | 6.5 |
Risk (lower is worse)
3.7/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 1.8 |
| days to cover | 8.3 |
| volatility | 0.0 |
| put call | 10.0 |
| implied vol | 0.0 |
| max pain risk | 3.0 |
| beta | 2.7 |
- ▸High short interest justified: 17%
- ▸High IV: 106%
- ▸Above max pain $0
- ▸Concentration risks: 1 HIGH (10-K Item 1A — sized via position_sizing, validated via buy_confidence)
Catalyst
6.0/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 6.7 |
| earnings timing | 5.0 |
| surprise avg | 5.5 |
| news activity | 8.0 |
- ▸Strong earnings: 3B/1M
- ▸Earnings in 6 days
How the verdict was assembled
Engine trigger
Quality below minimum threshold.
Engine technical detail
verdict_path:
L1:HARD_BLOCK:QUALITY_FLOORPassed (4)
- MOMENTUM:8.0>=5.5
- NEWS_EVENTS:NONE_RECENT
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (2)
- ASYMMETRY:-1.5=NEGATIVE
- EARNINGS_PROXIMITY:6d<=7d
Warning (2)
- INSIDER:0.24%=MODERATE
- 8K_CSUITE_CHANGE:5.02 (officer departure/appointment)
Reward-to-Risk
-1.46
Upside
-21.8%
Downside
15.0%
Sizing output
AVOID
SetupBreakout — Golden cross, above all MAs, RSI 64, MACD bullish
EdgeNo clear edge — No clear edge identified
SuitabilityAggressive — Beta 2.19>1.3, MCap $0.9B<$5B
Investment implication
The SELL_IF_HOLDING verdict reflects the ASYMMETRY gate's -1.5=NEGATIVE outcome against Momentum at 8.0 and asymmetric R:R of -1.46.
The strongest dimensions are Momentum at 8.0, Catalyst at 6.0, and Sentiment at 5.2; the weakest are Growth at 2.0, Peer rank at 2.1, and Quality at 2.5. The V9 engine flagged 2 failed gates with 2 warnings, producing an asymmetric reward-to-risk of -1.46 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Cash Burn Quality Floor Breach
Trip ifFCF as a percentage of revenue falls below -40%.
- P2Perfect Earnings Beat Streak
Trip ifEPS surprise stays below 0% for 2 consecutive quarters.
- P3Analyst Upside Despite Light Coverage
Trip ifAverage analyst price target falls by more than 20%.
- P4High Short Interest Elevated Iv
Trip ifShort interest rises above 35% of float.
- P5Pullback In Rising Trend
Trip ifPrice falls more than 15% below the 200-day moving average.