10x Genomics Q1 Earnings: A Crucial Crossroads for the Genomics Leader?

With 10x Genomics (NASDAQ: TXG) set to report Q1 2025 results on May 8, investors are bracing for what could be another pivotal moment for the biotech firm. The company, a pioneer in single-cell and spatial genomics, has faced headwinds in recent quarters, including slowing revenue growth and persistent losses. Here’s everything you need to know ahead of the earnings call.

The Numbers That Matter

Analysts project a 5.9% year-over-year revenue decline to $132.7 million for Q1 2025, marking the third consecutive quarter of slowing growth. This follows a 10.3% drop in Q1 2024, signaling a deepening revenue slump. On the bottom line, the consensus calls for an adjusted loss of $0.29 per share, a slight improvement from the $0.40 EPS loss in Q4 2024 but still a far cry from profitability.

A Downward Trend in Analyst Sentiment

Recent revisions to estimates tell a cautionary tale. Over the past 30 days:
- The EPS consensus has been cut by $0.10, from -$0.19 to -$0.29.
- Revenue estimates have dropped from $135.4 million to $132.5 million.
- One analyst outright downgraded their Q1 revenue outlook.

These revisions reflect growing skepticism about 10x Genomics’ ability to execute amid rising competition and shifting customer demand.

The Guidance Gauntlet

In February, the company revised its full-year 2025 revenue guidance to $610–630 million, slightly below the consensus of $630.4 million. This implies a mere -0.19% revenue growth for 2025—a stark contrast to the 9.02% growth projected for 2026. The cautious outlook underscores challenges in scaling its technology and retaining market share.

Why Investors Should Pay Attention

The stock’s recent 18.8% surge in April—outpacing a 5.9% gain in its sector—hints at investor optimism. But fundamentals remain shaky. Key risks include:
- Execution uncertainty: In the past four quarters, TXG has beaten EPS estimates only twice.
- Competitive pressures: Rivals like Illumina (ILMN) and newer entrants are eroding 10x’s dominance in single-cell sequencing.
- Valuation concerns: The stock trades at a P/S ratio of 2.3, above peers like Danaher (DHR) at 1.8, despite weaker growth.

The Zacks Edge

Analyst sentiment, as captured by Zacks Investment Research, is neutral-to-bearish. The Zacks Rank #3 (Hold) is supported by a -3.65% Earnings ESP, suggesting a higher likelihood of missing estimates. This metric factors in analysts’ recent downward revisions, which now place the “Most Accurate Estimate” below the broader consensus.

Conclusion: A Tightrope Walk for TXG

Investors face a tough calculus. On one hand, 10x Genomics’ long-term potential in spatial genomics and multiomics is undeniable. Its products, such as the Visium Spatial Genomics platform, are critical for cutting-edge research. On the other hand, the company’s struggles with consistent revenue growth and profitability are undeniable.

If TXG beats Q1 estimates—especially on revenue—expect a pop in shares. But a miss could amplify fears of a prolonged slump. With the stock up 18.8% in April on no news, the bar for a positive reaction is set high.

The May 8 report will serve as a litmus test for whether 10x Genomics can regain its footing or if it’s destined to become a cautionary tale in the high-stakes world of genomic tech. Investors should prepare for volatility—and keep a close eye on both the top and bottom lines.

Final Take: Buy the dip if expectations are reset, but tread carefully. TXG’s stock is a bet on long-term innovation, not near-term results.