Image source: Pacific Biosciences.

What: After shares sold off sharply in June following an update with investors, bargain hunters returned in July, sending shares in Pacific Biosciences (PACB 13.36%) 21.6% higher, according to S&P Global Market Intelligence .

So what: On June 21, the company updated its investor presentation to include additional information regarding the pace of shipments for its new gene-sequencing machine, the Sequel.

The company's guidance on the 21st included a robust forecast for top-line growth this year, but the number of Sequel systems delivered disappointed some investors who were hoping for a faster ramp.

Specifically, in the first two quarters since launching the Sequel last October, management notched 79 orders. However, of those 79 machines, only 28 systems were shipped to customers in that period. According to management, shipments are purposefully being throttled back so that the company can quickly fix any bugs identified with early users.

Although the delivery schedule suggests that revenue will climb at a more measured pace than some might like, management does expect that deliveries will pick up later this year. During its presentation to investors, management forecast that a combination of filled orders and demand for consumables to run these systems will translate into sales of about $80 million this year, up 70%. For comparison, sales grew 53% in 2015.

Now what: Pacific Biosciences is scheduled to report second-quarter financials on Aug. 4 and investors will be paying close attention to that report because competitor Illumina Inc. (ILMN 0.62%) reported its second-quarter results already and those results showed a snap back in growth from Q1.

In Q1, Illumina's sales improved by only 6% -- well below internal forecasts. However, in Q2, sales grew 11% versus a year ago primarily thanks to strength in Asia and the Americas. Illumina's results in Europe remained weak, with revenue there slipping 4% year over year in the period. One question Pacific Biosciences will want answered by management is whether the company is similarly struggling in Europe or if it's winning business there from its much larger competitor. 

Overall, optimism that rising Sequel shipments will translate into revenue growth that could eventually allow the company to turn a profit may not be misplaced, but Pacific Biosciences admittedly has its work cut out for it. Pacific Biosciences has less than 200 machines deployed globally, while Illumina has more than 7,500 up and running at customers.

Nevertheless, Pacific Biosciences is an intriguing small company in a fast-growing genomics market and that means small cap investors ought to have it on their radar. A lot of insight could be given when management reports in a couple days, however, and that may suggest that investors take a wait-and-see approach.