Why Pacific Biosciences of California's Stock Is Up Again Today

It was another good day for the DNA sequencer. Here's why.

Brian Feroldi
Brian Feroldi
Oct 9, 2015 at 3:44PM
Health Care

What: Shares of Pacific Biosciences of California (NASDAQ:PACB), a next-generation gene sequencing company, are having another good day today as they were up more than 11% in late trading on heavier than normal volume.

So what: While there doesn't appear to be any particular news today driving the shares higher, Pacific Biosciences stock has been on an absolute tear since the company announced its new nucleic acid sequencing platform called "The Sequel System" which is based on its single molecule, real-time technology. Since making that announcement on September 30th shares have now more than doubled in price.

PACB Chart

Pacific Biosciences also got a nice bump earlier this week after it showcased the new system at the American Society of Human Genetics annual meeting in Baltimore on October 6, so attendee's must have been impressed with the system. 

The company is claiming that its newer system offers a lower price and smaller footprint while still providing all the benefits that its existing system had to offer.

For investors in the stock, the company is claiming that the new system will be cheaper to build, which should lead to margin expansion and help the company get toward profitability quicker.

Now what: If this new system brings with it an uptick in orders and expanding margins at the same time then the future certainly could be finally looking bright for its long-term investors. Personally, I'm content to remain on the sidelines until we see how revenue and gross margins proceed after this new system is finally launched for sale. If it lives up to the promises that management are touting then the company could be a great buy even if shares continue to move higher from here. However, until we see signs of that happening I think it's wise to be cautious with this stock for now.