10x Genomics Maintains Promising Growth and Strategic Positioning with Buy Rating

Morgan Stanley analyst Yuko Oku maintains a Buy rating on TXG, citing promising growth in consumables segment, positive adoption of new products, and potential synergies from the Scale acquisition. Despite challenges with instrument sales, Oku believes in 10x Genomics' long-term potential and commitment to financial discipline, making it an attractive investment. Canaccord Genuity also maintains a Buy rating with a $16.00 price target.

10x Genomics (TXG) has reported a significant turnaround in its fiscal 2025 Q2 earnings, marking a return to profitability after years of losses. The company reported a net income of $34.54 million, a 191.1% increase from a $37.90 million loss in the prior year. Revenue rose 12.9% year-over-year to $172.91 million, driven by strong performance in the consumables segment, which contributed $122.19 million [1].

The company's Chromium platform accounted for $85.79 million, while the Spatial platform added $36.40 million to the revenue. Instruments revenue totaled $14.50 million, with Services revenue standing at $8.47 million, and License and royalty revenue accounting for $27.75 million. Despite the positive earnings, shares fell 4.83% weekly post-earnings, highlighting the mixed market sentiment towards the stock [1].

Analysts have expressed optimism about 10x Genomics' long-term potential. Morgan Stanley analyst Yuko Oku maintains a Buy rating on TXG, citing promising growth in the consumables segment, positive adoption of new products, and potential synergies from the Scale acquisition. Despite challenges with instrument sales, Oku believes in the company's long-term potential and commitment to financial discipline, making it an attractive investment. Canaccord Genuity also maintains a Buy rating with a $16.00 price target [2].

10x Genomics' strategic acquisition of Scale Biosciences for $30 million is a notable move. This acquisition brought quantum barcoding technology, which enables high-throughput, instrument-free single-cell analysis, slashing the cost per cell to less than one cent. This technology addresses a critical bottleneck in the field and positions 10x Genomics to capture market share in a sector where affordability and throughput are becoming non-negotiable [2].

The company's pivot towards biopharma is another strategic move. 10x Genomics aims to grow biopharma revenue to 50% of total sales within the next few years. This shift is already paying dividends, with biopharma clients less sensitive to budget cycles and more willing to invest in high-impact genomic tools. The reorganization of the sales force to focus on pharmaceutical clients, coupled with pricing reductions for single-cell systems, has made 10x's technology more attractive to drug developers [2].

10x Genomics' financial discipline has been a cornerstone of its strategy. A $27.3 million litigation settlement in Q2 2025 transformed a $37.9 million net loss into a $34.5 million profit, while cash reserves now stand at $447.3 million. This liquidity allows the company to fund R&D and strategic acquisitions without dilutive financing—a rare advantage in capital-intensive sectors [2].

The integration of AI into platforms like Xenium is accelerating the company's ability to deliver actionable insights. By leveraging machine learning for biomarker discovery, 10x is reducing the time and cost of drug development, a critical value proposition for biopharma clients [2].

While near-term challenges such as weak consumables and instrument sales in the U.S. persist, 10x Genomics is laying the groundwork for a new phase of growth. The acquisition of Scale Biosciences has unlocked scalability, international demand in China is providing a revenue buffer, and the shift to biopharma is creating a more stable business model. For investors, the key question is whether the market is underestimating the long-term value of these moves [2].

References:
[1] https://www.ainvest.com/news/10x-genomics-2025-q2-earnings-profitability-returns-net-income-surges-191-1-2508/
[2] https://www.ainvest.com/news/10x-genomics-strategic-reinvention-single-cell-genomics-macroeconomic-headwinds-2508/