Why This 10X Genomics Analyst Is Turning Bearish, Slashing Price Target

10X Genomics Inc (NASDAQ: TXG) reported preliminary second-quarter revenues Thursday that were meaningfully below the consensus estimates.

While the miss was due to several factors, the most significant was China’s COVID-19 related lockdowns that led to the closure of academic labs, according to a BofA Securities analyst. 

The 10X Genomics Analyst: Derik de Bruin downgraded the rating for 10X Genomics from Neutral to Underperfor while slashing the price target from $80 to $35.

Related Link: 10X Genomics Reports Q2 Preliminary Revenues, Shares Plummet On Missing Street Expectation

The 10X Genomics Takeaways: Apart from restrictions in China, lower consumer demand, logistics issues and forex headwinds adversely impacted revenues, de Bruin said in the downgrade note.

Revenues from the APAC and EMEA regions declined in the quarter, the analyst said.

“Even though Americas revenue of ~$70.9 million was up +8% y/y (+19% q/q), previously discussed changes to the sales organization are hampering commercial operations,” he added.

“After several quarters of lackluster growth due to a mix of issues, and with no quick fix in sight as the market / FX / execution issues will likely continue to hamper progress in 2H22,” de Bruin further said in the note.

TXG Price Action: Shares of 10X Genomics were tanking by 22.75% to $33.44 Friday.